Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

PRICE'S PATENT CANDLE COMPANY LIMITED BILL [Lords]

ULSTER BANK BILL [Lords]

Orders for Second Reading read.

To be read a Second time tomorrow.

Oral Answers to Questions — TRADE AND INDUSTRY

Europe Open for Business

Mr. French: To ask the President of the Board of Trade how many businesses have responded to his Department's Europe Open for Business initiative.

The Minister for Trade (Mr. Richard Needham): More than 400,000 requests for information have been received by the European Open for Business campaign since March 1988, including 266,000 calls to the hotline.

Mr. French: I congratulate my hon. Friend on the success of this initiative. What further measures does he propose to assist business after January, when the market starts? What representations has he received from business about the way in which it feels it can best be assisted to take the greatest advantage of single market opportunities?

Mr. Needham: I will pass my hon. Friend's congratulations to my right hon. Friend the Minister for Industry, who must take the credit as I was in other parts during the successful campaign. There is an immense amount to be done, not least in the enforcement and implementation of the single market. In the summer I shall certainly have discussions with industry about how we can develop the next part of our strategy for ensuring that British industry can take advantage of the single market and that the single market is working effectively.

Mr. Flynn: Does the Minister think it part of the success of the European Open for Business campaign that thousands of British jobs, including precious high-tech jobs from INMOS in my constituency, are being syphoned off to European countries? Why has his Department built a Chinese wall around itself, refusing to reply to messages from hon. Members and the managing director of INMOS who are begging the Department to set up practical partnership arrangements with INMOS to save high-tech

jobs that have a great future? If France and Italy are prepared to invest in British industry and technology, why is the Department not prepared to?

Mr. Needham: As far as I am aware, the hon. Gentleman has not yet been on the telephone to me. The number is 215 4301, and there is no Chinese wall around my office. The single market presents enormous opportunities for our industry. Now that Britain has returned a Conservative Government who are setting the right atmosphere and the right mood of confidence for industry, thousands of jobs will be created.

Mr. Adley: As one who has been on the telephone to my hon. Friend at the weekend about a company in my constituency, may I thank him for his assiduous attention to duty? At an early date, will he give me a report by telephone or note about the progress that he is able to offer the company, Lovaux, on its current problems?

Mr. Needham: I shall phone my hon. Friend later this afternoon.

Recession

Mr. Gapes: To ask the President of the Board of Trade when he next plans to meet representatives of the south-east CBI to discuss the effects of the recession on industry.

The President of the Board of Trade and secretary of State for Trade and industry (Mr. Michael Heseltine): I have no meetings planned with the CBI's south-east regional council in the immediate future, although I met the CBI's national manufacturing council on 29 April and I often meet individual CBI member companies.

Mr. Gapes: Why, given the jobs crisis in the south-east, has the Minister no such meetings planned? In view of the crisis in docklands and especially in Canary Wharf, the difficulties with the channel tunnel project and his so-called initiatives for east London corridors—we do not hear much about them at the moment—why is he doing nothing to deal with the serious jobs crisis in my constituency, where 4,600 people are out of work and the total is rising every month? One in nine people is out of work and we want jobs now.

Mr. Heseltine: I think that the hon. Gentleman misstates the contribution that the Government have made. We have brought down interest rates by 5 per cent. over the past 12 months and secured a level of inflation that is extremely attractive compared with that of our competitors. Above all else, to help the recovery of our economy we have kept the Labour party out of power.

Dr. Hampson: Does my right hon. Friend intend to explain to the CBI the significance of his adopting the title President of the Board of Trade? Does the board, which is potentially the most powerful of all Cabinet Committees, now meet?

Mr. Heseltine: The Board of Trade has not met for many decades, except in a celebratory mode to commemorate its 200 years of success. If it were to meet, it would be attended by the Archbishop of Canterbury, who would doubtless give inspiration to those Opposition Members who are looking for an industrial strategy.

Mr. Gordon Brown: I welcome the Minister to his new post. Will he confirm that, despite what he says, his Insolvency Service is predicting that insolvencies will rise to 35,000 this year? That will represent an appalling 60 per cent. increase in the number of business failures. Will the right hon. Gentleman confirm that the industrial policy that he once supported included investment in a research tax credit, a training levy, strengthened regional policy and reorganised export services, all measures that should be implemented immediately? Will he explain why action man is failing to act? Has the right hon. Gentleman exchanged his principles for his presidency?

Mr. Heseltine: I have merely exchanged the Department of the Environment for the Department of Trade and Industry. The hon. Gentleman is fully aware that his ideas were very much the discussion basis of the recent general election. Having failed to persuade the country, it is extremely unlikely that he can persuade the House.

Mr. John Marshall: I congratulate my right hon. Friend and his colleagues on the reductions in interest rates that have already taken place. May 1 humbly suggest to him that a further reduction may well be necessary?

Mr. Heseltine: I shall take the liberty of passing on my hon. Friend's views to my right hon. Friend the Chancellor of the Exchequer.

Regeneration

Mr. Mackinlay: To ask the President of the Board of Trade when he will next meet representatives of the TUC and of the south-east region of the CBI to discuss prospects for regeneration.

Mr. Heseltine: rose—[interruption] The answer is worth waiting for. I have no such plans at present.

Mr. Mackinlay: If the President were to meet representatives of employers and workers in south-east England, what excuses would he advance for the record number of liquidations in the first quarter of the year and for the fact that 800 jobs are being lost in the region every day? What excuse would he offer to Essex man and Essex woman, who are enduring unemployment of 66,000 in their county this year?

Mr. Heseltine: I would offer no excuse. I would merely say that the country has to fight its way out of one of the worst recessions that we have seen since the war, and that it must do that against a background of all similar capitalist nations facing similar problems. The only way in which we shall succeed in fighting our way out is to excel in the increasingly competitive world that we face.

Mr. Rowe: Is my right hon. Friend aware that in the part of the south-east that I represent the Government arc already showing clear signs that they recognise the certainty that Kent will lead the regeneration of the region? They are already spending millions of pounds on the necessary infrastructure. Will my right hon. Friend confirm that all the forecasts suggest that the volume of trade passing through and settling in Kent will be such that Kent will need to receive continued Government support?

Mr. Heseltine: My hon. Friend is right to ask that question. The level of Government support is substantial

in terms of the infrastructure plans that are already under way and those that will unfold as the decade proceeds. It is a fact that the part of south-east England that my hon. Friend represents is bound to benefit enormously from the completion of the single European market. The scale of the benefit will depend very much on the entrepreneurial ability of British companies to react to it.

Electricity Generation

Mr. Hall: To ask the President of the Board of Trade what consulations he has had with the chairman of British Coal concerning future long-term contracts with the electricity generating companies.

The Minister for Energy (Mr. Tim Eggar): I meet the chairman of British Coal on regular occasions and discuss a variety of issues.

Mr. Hall: That is a remarkable answer from a Department that now claims to be interventionist in industrial policy. Is the President of the Board of Trade aware that, before the privatisation of the electricity generating industry, it was announced that Fiddlers Ferry, a coal-fired power station in my constituency, was to use 2 million tonnes of imported low-sulphur coal a year? That would serve only to worsen our balance of trade deficit and to threaten jobs in the Lancashire coalfield, where Parkside is the only remaining pit, and it would leave us with sulphur dioxide emissions of 70,000 tonnes a year. Will the right hon. Gentleman now take urgent action to reduce coal imports, negotiate with British Coal to ensure that the power generating companies have a long-term coal plan, stop the dash for gas, invest in clean coal technology and rein back opencast mining?

Mr. Eggar: No. It is not an appropriate role for Government to stop coal imports, nor could we under our international obligations. However, I am confident of British Coal's ability at some collieries, particularly at the inland coal generating plants, to compete with coal imports. It must be the priority of all hon. Members to ensure that British Coal becomes world competitive. I am confident that it can.

Mr. Andrew Mitchell: Is my hon. Friend aware that it is the size of the contracts to be concluded between the coal industry and the generators, not the shape of the privatisation, that will determine the size of the coal industry in the future? Can he tell the House when he expects those contracts to be concluded?

Mr. Eggar: I am aware, as I am sure the House is, of the importance of those commercial contracts to the future structure and size of the British coal industry. I understand that negotiations are taking place between the generating companies and British Coal and the regional electricity companies and the generating companies. They are commercial negotiations, but I am taking a close interest in them.

Mr. Redmond: What discussions has the Minister had with the chairman of British Coal on importing dirty fuel?

Mr. Eggar: As I have already said, I have had a number of discussions with the chairman of British Coal on a variety of matters. As the hon. Gentleman will be aware,


British Coal has alleged that coal has been dumped by certain countries, and those allegations are with the European Commission.

Dr. Michael Clark: Does my hon. Friend agree that one way to ensure that long-term contracts for British coal continue is to ensure that research and development into efficient and clean coal-burn technology continues? Does my hon. Friend have plans to ensure that our lead in that area is maintained, even after privatisation, by ensuring that the Coal Research Establishment at Stoke Orchard survives?

Mr. Eggar: I am well aware of the importance that my hon. Friend and others attach to clean coal and new coal-burning technologies and we shall take that into account as we go through the consultation process on the road to privatisation.

Mr. Dobson: Does the Minister recall that the Government's merchant bank advisers, Rothschild, advised the Secretary of State to intervene directly in the negotiations between the generators and British Coal to ensure that British Coal obtained high-take, long-term contracts? Will the hon. Gentleman take that advice and intervene; or is this yet another example of his having no such plans at the moment?

Mr. Eggar: I do not think that the hon. Gentleman has been listening. I made it clear that I understood that commercial discussions and negotiations were going on. I also made it clear that I am keeping a close watch on them.

Mr. Oppenheim: Would not limits on coal imports effectively be placing the interests of the coal industry above those of its customers, which include many energy-intensive industries employing millions of people in jobs which may well be lost if those industries are forced to rely on high-price domestic coal? Are not such trade barriers ultimately self-defeating —first for the protected industry which simply becomes cosseted and inefficient, secondly for its customers, who have to buy high-priced goods, and thirdly for the economy as a whole?

Mr. Eggar: As usual, my hon. Friend has put his point effectively and well. We are doing no one any favours by artificially raising energy prices both for the domestic consumer and for the major energy users. I remind my hon. Friend that, since 1979, the Government have made about £17 billion available to British Coal; that works out at a third of a million pounds for every one of the 50,000 people now employed in collieries, and it shows the extent of the subsidies and other assistance given to British Coal by this Government.

Monopolies and Mergers

Mr. Watson: To ask the President of the Board of Trade what recent representations he has received on policy for monopolies and mergers within the banking and financial sector.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton): I have received a number of representations on the bid for the Midland bank by the Hong Kong and Shanghai banking corporation, and on the possible offer made by Lloyds bank, which has now been withdrawn.

Mr. Watson: The threat of a Lloyds takeover of the Midland bank has now been withdrawn, but had the takeover gone ahead it would have posed a threat to thousands of jobs and, possibly, hundreds of bank branches. Will the President of the Board of Trade take account of his own advice now that he is Secretary of State? According to that advice, in the event of a takeover bid involving a company with more than 500 employees, that company should involve its employees in consultation plans with a view to implementation of the takeover, and the bidder should be required to show that any benefit resulting from the takeover would be in the wider national interest.
Why did the President of the Board of Trade show such interest in takeovers before he returned to government, and why, now that he is back in government, has no Government action been taken on this important matter?

Mr. Hamilton: The Government take the national interest into account in all mergers and takeovers. If the Lloyds bid had gone ahead, it would have been examined by the Monopolies and Mergers Commission, which would have considered both its benefits and its disadvantages. The Government's policy is perfectly clear; it is as it always has been. We look to competition, but not exclusively to competition: the national interest may well be wider.

Mr. Quentin Davies: I welcome the likelihood that, for the foreseeable future, there will be four rather than three clearing banks in England and Wales. But are my hon. Friend and my right hon. Friend the President of the Board of Trade happy that those four banks should have 90 per cent. of the corporate lending market? Has not that effective oligopoly enabled the banks to achieve a remarkable success in driving through an increase in their margins and charges at a time of falling loan demand, in a recession? Will my hon. Friend ask the Office of Fair Trading to take a thorough look at the whole position?

Mr. Hamilton: My right hon. Friend the President of the Board of Trade has asked the Director General of Fair Trading to keep that question under review. My hon. Friend will be aware that, last year, the director general considered whether there was any evidence of collusion, anti-competitive practice or exploitative behaviour by the banks in their relations with small businesses. He concluded at that time that there were no grounds for action under competition legislation, but it is open to him to institute an investigation at any time if he thinks fit.

Petroleum Engineering Department

Mrs. Fyfe: To ask the President of the Board of Trade what plans he has to relocate the petroleum engineering department from London to Aberdeen.

Mr. Eggar: The arguments for and against relocating the Department's petroleum specialists to Aberdeen are being considered in depth by independent consultants. I await their report and conclusions.

Mrs. Fyfe: Has not the consultation being going on for a considerable time? If it is not obvious that the PED should be relocated in Aberdeen, will the Minister tell us what factors are persuading him that that may not be a good idea?

Mr. Eggar: The independent consultants' study has begun, and I hope to receive the results in August. We are committed to publishing it, and I shall of course take account of its findings in reaching a final decision.

Mr. Raymond S. Robertson: Will my hon. Friend refer the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) to the Scottish Conservative manifesto? It stated unequivocally that, should the independent inquiry say yes to relocation, the Government were committed to relocating the PED, and that in the meantime it would be entirely wrong to pre-empt the inquiry.

Mr. Eggar: I agree, and I pay tribute to the energy with which my hon. Friend has made me aware of his concerns— and those of his constituents—about the relocation of the PED.

Mr. Malcolm Bruce: Will the Minister assure the House that the comments that he made on Monday about the high cost of operating in Aberdeen were not an attempt to soften us up for the decision not to relocate to Aberdeen? Does he accept that the industry would like the jobs to be located in Aberdeen, as that would increase efficiency? The comparison with America, therefore, is hardly relevant. Will he put pressure on the Scottish Office to make the necessary infrastructure investment in north-east Scotland, which would help to reduce operating costs?

Mr. Eggar: I assure the hon. Gentleman that the comments that I made in Aberdeen about the potential long-term problem of moving to Aberdeen's higher-cost base do not show that I have formed any view about the PED. I am deliberately keeping an open mind until I receive the consultants' report.

Mr. Robert Hughes: On a point of order, Madam Speaker—

Madam Speaker: Order. I shall take points of order later.

Ealing Enterprise

Mr. Harry Greenway: To ask the President of the Board of Trade what funding his Department has provided to Ealing Enterprise; and what estimate he has made of the number of jobs created.

The Parliamentary Under-Secretary of State for Technology (Mr. Edward Leigh): Ealing Enterprise received pump priming in its start-up phase and is now supported by the West London training and enterprise council.

Mr. Greenway: Is my hon. Friend aware that Ealing Enterprise was founded by me and that it has been a source of many jobs for my constituents and others? Will he put more money into it and commend its excellent example to other parts of the country?

Mr. Leigh: Most Members are just Members, but my hon. Friend is Mr. Ealing. The whole House will recognise that he is one of the most dedicated and conscientious constituency Members. The enterprise agency that he founded has been successful. It has been helped by us in the past and it has created more than 1,200 jobs. Enterprise agencies are central to our strategy of creating

the enterprise culture which so transformed the economy in the 1980s and resulted in there now being more than 3 million businesses in this country.

Mr. Campbell-Savours: Does the Coopers and Lybrand Deloitte report on inward investment relate to London, and in particular to Ealing, in the same way as it relates to the northern region, in so far as it makes recommendations about assisted area status? What is the report's status? Is it a consultative document? Will it be debated by the House before Ministers make recommendations? Will we have the opportunity to question Ministers on the contents of the report, which has major implications for my constituents?

Mr. Leigh: One thing is absolutely certain: the report has nothing to do with Ealing Enterprise.

GATT

Mr. Ian Taylor: To ask the President of the Board of Trade what progress has been made in the general agreement on tariffs and trade negotiations.

Mr. Needham: Talks are continuing between the United States and the European Community to try to resolve their remaining differences, principally over agriculture. That is essential to open the way to wider agreement in the round.

Mr. Taylor: Has my hon. Friend noted the forecast that a successful conclusion of the GATT talks could lead to an increase in world trade in goods and services of £110 billion a year? With the safeguards for countries in the developing world, might not the benefits of such a successful conclusion be far more in the long-term interest of those countries than the discussions in Rio, with all the media attention focused on them? May we have more media attention focused on the GATT round?

Mr. Needham: I entirely agree that a successful outcome to the GATT round would lead to an increase in trade, as suggested by the Organisation for Economic Co-operation and Development, of £110 billion. That wealth creation can produce the tax stream that can do so much to improve the lot of the third world and, above all, its terrible environmental problems.

Mr. Madden: To ensure confidence in the British textile and clothing industry, will the Minister say when the Government will announce a further extension to the multi-fibre arrangement?

Mr. Needham: As the hon. Gentleman knows, the multi-fibre arrangement will finish at the end of this year, and the method of replacing it is tied up with the GATT negotiations. I still believe that it is probable rather than possible that we shall be able to reach some agreement on GATT, but, failing that, I assure him that the Government will ensure that arrangements are put in place to cover the future of the MFA.

Monopolies and Mergers Commission

Mr. Barry Field: To ask the President of the Board of Trade what plans he has to review the legislation preventing a Monopolies and Mergers Commission inquiry reconvening to review the effect of its recommendations.

Mr. Neil Hamilton: Where appropriate, the Director General of Fair Trading may be asked to review the effectiveness of measures taken following a report by the Monopolies and Mergers Commission. He also has a general duty to keep markets under review. Where he has concerns about the competitive situation, he may ask the MMC to look again at markets that have been the subject of previous investigation by the commission.

Mr. Field: May I be the first Conservative Member to congratulate my hon. Friend on his appointment? As he saved the nation from the roof tax in a memorable speech, I hope that I can invite him to save the nation from a number of perverse decisions by the Monopolies and Mergers Commission—such as the decision on the brewers, which has thoroughly upset all the landlords and beer drinkers of the nation, the decision on gas prices which has put the horticulturalists in a parlous state, and the report on Isle of Wight ferries which said that we had the most expensive ferries in the world but drew no conclusions. Will my hon. Friend either amend the legislation so that in future the Monopolies and Mergers Commission must reconvene within nine months to reconsider the results of its actions, or abolish that last reservoir of state-subsidised socialism for ever?

Mr. Hamilton: I cannot satisfy my hon. Friend on his last point, but he may be aware that the chairmanship of the commission becomes vacant later in the year. If he would like to apply for the job, he might be able to sort it out himself.

Recession

Mr. Kilfoyle: To ask the President of the Board of Trade what representations he has received from businesses in the north-west concerning the effects of the recession on industry.

Mr. Heseltine: Ministers and officials of my Department receive considerable correspondence about the state of business in the north-west.

Mr. Kilfoyle: Given that two Tory recessions have cost a third of a million manufacturing jobs in the north-west and that last year 4,130 businesses in the north-west went bust—a 54 per cent. increase on the previous year—would not Ministers be better served by changing their approach and policies rather than the title of their Department?

Mr. Heseltine: It is curious that the hon. Gentleman should ask me that question when, if his party had been elected to government, it would by now have refused to order the fourth Trident submarine and be threatening the nuclear industry in the north-west and slaughtering the defence budget on which so many companies there depend.

Mrs. Peacock: My right hon. Friend will be aware of the importance of the GATT negotiations not only to the textile industry in the north-west, but to Yorkshire. Can he assure the House that the Government will retain their robust position on the GATT round in the hope of a successful outcome for textiles as well as agriculture?

Mr. Heseltine: My hon. Friend raises perhaps the most important opportunity facing our companies. We are committed to doing everything in our power to press our

colleagues to reach an early conclusion to the GATT round, and I assure my hon. Friend that we shall continue to do so.

Mr. Hoyle: As the President of the Board of Trade has taken that rather pompous title, does it mean that he is no longer bothered about industry and energy, or can he tell the people of the north-west what he intends to do about all the industry that has been destroyed by the Government and about the last remaining pit which is hanging on by a thread?

Mr. Heseltine: The fact that the hon. Gentleman somehow thinks that trade has nothing to do with industry or the price of energy is a devastating revelation of the ignorance of the attitudes of the Labour party.

Mr. Sumberg: Does my right hon. Friend recall that before the election the hon. Member for Liverpool, Walton (Mr. Kilfoyle) came to the House to forecast doom and gloom for the north-west, saying that there would not be one Conservative seat left and that we should be completely decimated in that area? Should we not therefore take his forecasts with a large pinch of salt?

Mr. Heseltine: I have not kept such a beady eye on the hon. Gentleman as my hon. Friend has. Perhaps I shall do so in the future, although on mature reflection I very much doubt whether I shall.

Regional Policy

Mr. Hutton: To ask the President of the Board of Trade if he will make a statement on the Government's regional policy.

The Minister for Industry (Mr. Tim Sainsbury): The Government remain committed to an effective, well-focused regional policy.

Mr. Hutton: Does the Minister agree that an important element of an effective regional policy for Britain in the 1990s, unlike the statement that he has just made, would include specific and targeted measures to help constituencies such as mine which are dependent on defence-related spending? Is he aware that tens of thousands of jobs in the defence industry have been lost since 1990? When will he present to the House a range of specific policies which will offer a reasonable prospect of secure employment to people in my constituency?

Mr. Sainsbury: I assure the hon. Gentleman that employment opportunities will be the major factor that we shall take into account in our review of the assisted areas map. The implications for employment opportunities of cutbacks in defence spending will be fully taken into account, along with all other relevant factors.

Mr. Knapman: Will my right hon. Friend confirm that business and commerce should always be based where they are most efficient, and that we therefore have no national cohesion policy?

Mr. Sainsbury: I assure my hon. Friend that the Government do not intend to try to dictate to industry or commerce where they should go. I recall industrial development certificates and, even more horrific, office development permits. I dare say that if the Labour party had its way we might return to those bad days.

Mr. John D. Taylor: As employment in the regions could be improved at a stroke by reducing interest rates, why does the Minister continue to support the exchange rate mechanism, which freezes those opportunities?

Mr. Sainsbury: Interest rates have some influence on industry's decisions on investment and expansion, but currency stability also has a great influence, as do many other factors. The right hon. Gentleman would do well to take that into account.

Mr. Bill Walker: When my right hon. Friend is examining the policies, will he look carefully at travel-to-work areas? In particular, will he note that in my constituency a travel-to-work area was created some years ago embracing Blairgowrie, Pitlochry and Aberfeldy? Anyone who knows the highland parts of Perthshire knows that it is nonsensical to describe that as a travel-to-work area.

Mr. Sainsbury: My hon. Friend must be the most knowledgeable person about those areas, and I admit that I should like to know them better than I do. However, travel-to-work areas will be the basic building block of the review of the assisted areas map and there will be no fresh census data on which to reassess those areas until 1994. That would leave the review too late.

Ms. Quin: In his book, "Where There's a Will", the President of the Board of Trade called for an active regional and industrial policy, but other DTI Ministers in the past have supported the anti-regional policies of the No Turning Back group. Will the Minister give a clear statement today that the DTI is turning its back on the No Turning Back group for good?

Mr. Sainsbury: I assure the hon. Lady, as I said in my original answer, that we have had and will continue to have not only an effective regional policy but an active one.

Mr. Michael Brown: May I draw to the attention of my right hon. Friend the fact that when my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) was in charge of regional policy up to the general election he promoted Government regional policy in my constituency by ensuring a Government grant of more than £12 million to the Kimberley-Clark factory, resulting in more than 750 jobs to be created next year—

Madam Speaker: Order. What is the question?

Mr. Brown: Will my right hon. Friend confirm that the presence in his Department of a distinguished member of the No Turning Back group clearly proves the Government's commitment to regional policy?

Mr. Sainsbury: I share my hon. Friend's admiration for the skill with which our hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) carried out his responsibilities for regional policy and I am glad to follow such an excellent record.

Coal Prices

Mr. Alan W. Williams: To ask the President of the Board of Trade what is his policy towards the attempts being made by the European Commission to establish a reference price for coal.

Mr. Eggar: The Commission has put forward preliminary ideas on reference prices for coal as a device to restrain excessive levels of subsidies for coal mining in some member states. There is no suggestion that the Commission intends to subsidise Community coal production so that it is all sold at a reference price level. We support the Commission's aim of reducing unjustifiable subsidies.

Mr. Williams: Is there not an appalling unfairness and absurdity in the fact that Britain, which produces the cheapest coal in Europe, is running down its coal industry while Germany, whose coal production is twice as expensive, is providing massive subsidies? What are the British Government doing to open up Europe's coal market?

Mr. Eggar: I have made it clear that the European Commission is as concerned as we are about the subsidies offered to some coal-producing member states and has made proposals to reduce the level of subsidies which it currently pays. Although we have some doubts about the precise proposals, we support the broad thrust of the Commission's suggestions.

Mr. Gallie: Will my hon. Friend and the House take note in response to an earlier question that Scotland is a supplier of low sulphur coal? May I welcome my hon. Friend's comments on the reference price and urge him to take urgent action to ensure that our coal can be sold on a level playing field with other coal produced in Europe?

Mr. Eggar: Yes, I share my hon. Friend's objective. Clearly, it is important that no artificial subsidies are available which distort market pricing.

Mr. Morgan: In the light of the President of the Board of Trade's curiously forked-tongued speech yesterday to the annual conference of the Union of Democratic Mineworkers, in which he said that he would not intervene in the relationships between British Coal and the two electricity generators, can the Minister tell the House what price and what length of coal supply contracts National Power and PowerGen should sign with British Coal to ensure long-term security of supply, long-term viability for the coalfield communities and his long-term friendship with Roy Lynk?

Mr. Eggar: The hon. Gentleman should do my right hon. Friend the courtesy of reading his speech, which clearly he has not, or—if he has—he has misinterpreted it. His latter question is a commercial matter for the generating companies and British Coal.

Textiles and Clothing

Mr. Nicholas Winterton: To ask the President of the Board of Trade what information he has concerning the total value of exports by the textile and clothing industries in the first quarter of 1992.

Mr. Leigh: They were £1.2 billion.

Mr. Winterton: Although I am sure that the whole House will congratulate the textile and clothing industry on its record exports in the first three months of this year, does my hon. Friend accept that imports were also up, at a record £2.1 billion, that this important sector of our economy is finding it difficult to export to countries in Asia


and to the United States of America, which erected substantial barriers against us, and that overall we are, sadly, dangerously exporting our manufacturing base? What steps will my hon. Friend take to stand up for British industry and help the regeneration of our manufacturing base?

Mr. Leigh: As my hon. Friend is the Member of Parliament for manufacturing, we always welcome his positive, helpful statements on these occasions. No doubt he will have noted that since the early 1980s manufacturing output is up by a quarter, productivity by a half and exports by three quarters. He himself has pointed out that exports are up by a record 9 per cent. in the first quarter. Imports have declined by 1 per cent. in the past year. The key point is that the textile industry has successfully restructured, as my hon. Friend knows, into higher-valued lines which ensure that we are competitive on world markets. My hon. Friend and others and I must work together to ensure that we have a successful GATT round as we phase out multi-fibre arrangements and unfair subsidies.

Mr. Cryer: Will the Minister confirm that a successful GATT round with adequate arrangements for the textile and clothing industry, which employs 450,000 people in this country, including 12,000 directly in Bradford, does not mean an efficient, well-organised, high-investment industry asking for special treatment or favours but one that is simply asking for fair competition, an end to dumping, and the prevention of outward processing and the many other abuses that it has had to face from other countries? Will the Minister assure us that he will not allow the Government to let down the textile and clothing industry and cause further losses in a manufacturing industry which is vital for our nation?

Mr. Leigh: That was an excellent question and I agree with everything that the hon. Gentleman said. He is right that the textile industry is vital and successful, as we have seen in the increase in the value of exports. The challenge now is to ensure that we have a successful GATT round. I have no doubt that when my right hon. Friend the President of the Board of Trade takes over the presidency of the trade part of the Community in July he will ensure a successful conclusion to the GATT round. I can assure the House that the Government are absolutely committed to a successful and competitive textile industry. Our textile industry now has nothing to fear from international competition because we are so competitive in the higher-valued brands. We shall ensure that MFAs are phased out fairly and properly.

Mr. Anthony Coombs: Notwithstanding the excellent export performance of the textile industry, particularly carpet manufacturers, does my hon. Friend recognise that further progress in Europe depends on stopping national Governments giving illegal subsidies to various parts of their textile industries? For instance, five years on, £5 million has still not been repaid to the Belgium Government by Beaulieu, the world's biggest carpet manufacturer, and the Italian Government are still paying significant subsidies to textile machinery companies in Italy which are pricing British firms out of jobs.

Mr. Leigh: My hon. Friend is absolutely right. The whole purpose of the GATT round and our negotiations with the EC is to prevent unfair subsidies.

Mr. Henderson: Since the Minister took over his new responsibilities, representatives of the textile and clothing industry will have made representations to him pointing out that that industry, perhaps more than any other, has been savaged by the current recession, with the loss of 70,000 jobs and perhaps many more job losses to come. Will the Minister accept, under his new boss, the responsibility that the Department of Trade and Industry and now the Board of Trade have to help companies to stop the job loss and to restructure their business? If the Minister accepts that responsibility, what measures does he propose?

Mr. Leigh: That is precisely what companies are doing. They are restructuring their business because they realise that output in western countries has had to decline over a long period as a result of increased competition from low-value areas. Unfortunately, that restructuring involves a loss of labour because it involves new machinery. I do not know what the Labour party's policy on these matters is. Clearly, it has no policy except to make vague generalisations about throwing money at the problem—a policy which has failed in the past and would fail again.

Mr. Tredinnick: Is my hon. Friend aware that the restructuring to which hon. Members have referred has come about largely because of the protection that the multi-fibre arrangement has given to companies, enabling them to make changes and to plan for the future? Does he agree that an equivalent of the multi-fibre arrangement must be included in the GATT talks if we are to ensure the successful continuation of the industry?

Mr. Leigh: My hon. Friend is absolutely right and I can, indeed, give that assurance. Although the MFA will be phased out over a 10-year period, as the GATT round proceeds, there will be more than adequate safeguards for our own industry. That is absolutely essential, and there will be no weakening of our resolve on the matter.

Petroleum Engineering Department

Mr. Robert Hughes: To ask the President of the Board of Trade what plans he has to relocate the petroleum engineering department from London to Aberdeen.

Mr. Eggar: I refer the hon. Gentleman to the answer that I gave to the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) a short time ago.

Mr. Hughes: Does the Minister accept that the fact that BP has decided to move its office from Glasgow to Aberdeen makes the case for the petroleum engineering department coming to Aberdeen even more compelling? Will he give the House a categorical assurance that his denigratory remarks in Aberdeen recently do not signify any intention to repudiate the Conservative party manifesto pledge to move the PED to Aberdeen?

Mr. Eggar: I made no denigratory remarks in Aberdeen. I merely drew attention—quite understandably —to the need for Aberdeen to control its costs as a centre. I believe that Aberdeen is the offshore oil centre of Europe. It has done spectacularly well over the past 20 years, and I want to see it doing even better. I want it to be a Europewide centre, not just a United Kingdom continental shelf centre. Aberdeen has some things to do


to take advantage of those opportunities. I made that quite clear because oil companies had expressed to me their concern about the cost side. I repeat the assurance that I gave to the hon. Member for Gordon (Mr. Bruce) that I have an open mind with regard to relocation. I am awaiting the report from the independent consultants. I have given a pledge that that report will be published and I will, of course, take account of what it says.

Mr. Ian Bruce: Can my hon. Friend assure the House that he will not only consider moving the centre of offshore petroleum exploration, from London to Aberdeen, but will examine the possibility of moving to the AEA Technology site at Winfrith in my constituency, next door to the centre for onshore petroleum exploration? A new technology park is to be established there and a great deal of research work is already being done into petroleum technology. I am sure that a move to the site would be warmly welcomed.

Mr. Eggar: I have listened very carefully to what my hon. Friend has said and I will look into the matter further.

Mr. Salmond: Can the Minister reconcile the enthusiasm with which the Government move thousands of civil servants to bail out the subsidy junkies in the London docklands with their reluctance to move 80 civil servants from opposite Buckingham palace to the centre of the oil industry in Aberdeen? What will happen to a party in Scotland that pledged before the election to move jobs to the north-east of Scotland if, after the election, it is seen to be conspiring to keep them in the south-east of England?

Mr. Eggar: The hon. Gentleman knows perfectly well what was in the Scottish Conservative manifesto. He also knows perfectly well what I and my right hon. Friend the Secretary of State for Scotland have said. I suggest that he awaits the publication of the independent consultants' report and the decision that will be made taking account of that report and other matters.

Egypt

Mr. Dalyell: To ask the President of the Board of Trade if he will make a statement on trade with Egypt.

Mr. Needham: Our commercial relations with Egypt are good. United Kingdom exports to Egypt have been just under £300 million annually. Imports have been just under £150 million.

Mr. Dalyell: With a major railway contract between the Egyptian border and Tobruk, with 1 million or more Egyptians working in Libya and 5,000 or more British nationals working in Libya, what are the Egyptians saying about the imposition of the increasingly farcical sanctions and what is the cost of those sanctions to Britain? When Time magazine and the Pan Am lawyers—not exactly organs of the left—are saying that the target is wrong in respect of the Libyans who were, at most, operatives, will not the Government reconsider the whole question of sanctions, 'because the responsibility may lie in Teheran?

Mr. Needham: I know the hon. Gentleman's views about sanctions on Libya, but I spent the past six and a half years seeing the consequences of Libyan Government actions through the Semtex, machine guns and rocket

which have been blowing up the people of Northern Ireland and its economy—and so far as I am concerned personally, I should like the sanctions to be even harder against Libya.

Insolvency

Mr. Battle: To ask the President of the Board of Trade if he will make a statement on the workings of the Insolvency Act 1986.

Mr. Neil Hamilton: The Insolvency Act 1986 has a number of major aims: to provide remedies against abuse of limited liability by company officers; to regulate the activities of insolvency practitioners; to simplify formal insolvency procedures to allow official receivers to concentrate on protective and investigative work and to introduce new voluntary procedures allowing those in difficulties to come to an arrangement with creditors. I am broadly satisfied that the Act is achieving these objectives, but my officials in the Insolvency Service executive agency continue to monitor its workings.

Mr. Battle: I am grateful to the Minister for that reply, but does he accept that the Maxwell pensioners—and others, such as the Lewis's pensioners in Leeds—are trapped not only by faults in social security law, but by the inadequacies of the Insolvency Act 1986? Does he agree that the Government must amend that Act to ensure that occupational pensions are better protected and that they are not simply lost when a company goes under? If not, it would seem that the Maxwell episode is sadly proving to be the tip of a lost pensions iceberg.

Mr. Hamilton: As the hon. Gentleman will know, my right hon. Friend the Secretary of State for Social Security made a statement on Monday, an ingredient of which was that we should make provision under the Social Security Act 1990 to make deficits from pension funds that are wound-up a debt owed by the employer. The hon. Gentleman wants those debts to be made preferential. If that were done, it would be at the expense of other unsecured creditors of the company. It is not absolutely certain in welfare terms that that would be an improvement. However, my right hon. Friend the Secretary of State for Social Security has announced a wide-ranging review of the law on pensions and that is one of the subjects that it would be appropriate to consider in connection with that review.

Artefacts of Torture

Mr. Bowis: To ask the President of the Board of Trade what steps he is taking to deter the trade in artefacts of torture.

Mr. Needham: The export of leg irons, shackles, gang chains and certain types of handcuff which may be misused against prisoners is already controlled by my Department. We pay great attention to the human rights records of other countries when deciding whether an export licence should be issued.

Mr. Bowis: Does my hon. Friend accept that, just as it is right and proper that our overseas aid policy is geared to acceptable human rights in the countries to which our aid is targeted, the same should apply to our trade? Does my hon. Friend accept also that there is no way in which


any British firm should export devices which are either designed to be or turn out to be used as barbaric forms of torture or barbaric types of imprisonment, including the leg irons to which he has referred?

Mr. Needham: Indeed, they should not. There is, of course, a difficulty whereby certain products which in normal use are perfectly safe can be misused and changed into measures of repression when they get to countries overseas. As I have said, my Department, the Foreign and Commonwealth Office and the Ministry of Defence keep a very close eye on this.

Mr. Alton: How does the Minister justify the sale of such equipment—not just leg irons, but entire cells which have been used for the execution of political prisoners in totalitarian regimes—in contrast with another decision by his Department to deny to the Croatian Government the use of mine detection equipment for the humanitarian purpose of clearing mines from areas where civilians are living?

Mr. Needham: I do not justify that, and I would not even attempt to do so. The point in my previous answer—I hope that the hon. Gentleman listened to me—is that much of the equipment is exported and the exporting company has no idea that the equipment may be altered and used for the purposes that the hon. Gentleman describes. In those circumstances, it is impossible for the Government to stop the export of all sorts of equipment which, for the vast majority of the time, are perfectly proper products.

Mr. Bellingham: I, too, congratulate my hon. Friend on his recent appointment. Is he aware that we are talking not only about artefacts of torture but about artefacts of execution? Is he aware that the Amnesty International report gives details of a set of gallows being exported from this country to a certain middle eastern country? Does he agree that that is totally unacceptable and must be stopped?

Mr. Needham: I am grateful to my hon. Friend for his congratulations. As he knows, that was a single incident. Once the company had discovered it, it dealt with those involved. I agree that it is totally unacceptable to export gallows from this country.

Regional Policy

Mr. Byers: To ask the President of the Board of Trade if he will make a statement on his Department's plans for regional policy.

Mr. Sainsbury: The Government remain committed to an effective, well-focused regional policy. I announced to the House yesterday a review of the United Kingdom assisted areas map.

Mr. Byers: Is the Minister aware that, since 1979, unemployment in the northern region has increased by 58 per cent. and that bankruptcies have increased by more

than 200 per cent? Will he explain why, at a time of rising unemployment and record bankruptcies, the Government have cut regional assistance to industry in the north by 85 per cent. in real terms? When will the Government discharge their responsibilities to the people of the north by investing in the north so that it can bring real jobs to the people living there?

Mr. Sainsbury: The hon. Gentleman will recall that I said in my answer that the Government remain committed to an effective, well-focused regional policy. The focus, of course, can be improved by reviewing the assisted area map to take into account changes in employment, employment opportunities, industry and other factors in the region since the map was last drawn in 1984. The hon. Gentleman refers to the overall volume of expenditure. He will recall that there was a grant called regional development grant—RDG—which was remarkably unfocused, as I believe is generally agreed. Much of what was spent went on paying companies to do things that they were going to do anyhow.

Mr. John Greenway: Does my right hon. Friend agree that his Department is uniquely placed to consider which regions of Britain are best placed to have more Government Departments relocated there from London? While the whole House and, indeed, the whole country looks forward to the demolition of Marsham street, can my right hon. Friend ensure that only those jobs which need to remain in London will remain here and that as many as possible will be relocated to the regions, especially Yorkshire?

Mr. Sainsbury: I cannot give a guarantee to my hon. Friend, who is a great supporter of Yorkshire, but I can assure him that it has long been the Government's policy to relocate as many Government jobs as appropriate. I am sure that what my hon. Friend has said about the attractions of Yorkshire will have been carefully listened to by the Departments and will be taken into account when they come to make decisions about how many of their employees can be relocated and where they might best be relocated.

Mr. Wigley: Does the Minister accept that if regional policy is to be more effective in the future than it has been in recent years it needs not only a commitment of resources but an ability to fine tune so that assistance can be given in areas where there may be substantial closures of companies? Will he give an undertaking to the House both that the resources will be available and that flexibility will be built in to do a real job?

Mr. Sainsbury: I do not accept that regional policy has not been effective in the past, but I recognise the need for the policy to respond to changing circumstances. Indeed, that is why we are redrawing the map. Several of the instruments of regional policy, such as regional selective assistance, can take account of circumstances at any given moment in any given area.

Oral Answers to Questions — Points of Order

Several Hon. Members: On a point of order, Madam Speaker.

Madam Speaker: One at a time.

Mr. Peter Bottomley: On a point of order, Madam Speaker. I rise briefly to raise two linked points of order. One is on hybridity and the other is on judicial cases before the courts. The second one, to which reference is made on page 378 of "Erskine May", is about whether there is a substantial risk that there will be prejudice to the trial of a case. There is authority for saying that legislation can overrule cases which bodies may bring before the courts, especially the civil courts. I should be grateful for guidance on how that might affect clause 52 of the Finance Bill.
The second point of order is about hybridity, to which reference is made on pages 519 to 521 of "Erskine May". Sir Robin Maxwell-Hyslop referred to it in the 1975–76 Session as reported in Hansard, in volume 912, column 299. "Erskine May" says:
it is not easy to describe generally the ground on which such objections have been sustained or over-ruled.
My question to you, Madam Speaker, is whether there is a way, other than on the Floor of the House, in which clause 52 of the Finance Bill in so far as it refers to the building societies should be referred to the examiners. If that is a question on which you require notice, I can happily wait until tomorrow.

Madam Speaker: The hon. Gentleman should talk to the Public Bill Office about the matter. But I can tell him that the Bill to which he refers has been examined and it is not a hybrid Bill.
The sub judice rule does not apply to proceedings on Bills in Committee. What is in order on clause 52 of the Finance Bill is a matter for the Chairman of the Standing Committee to which it has been referred.

Mr. Tam Dalyell: On a point of order, Madam Speaker. It will be within the recollection of the House that when he answered Question 18 the hon. Member for Wiltshire, North (Mr. Needham) most unusually gave expression to a personal opinion as a Minister. I do not doubt that it was strongly felt—

Madam Speaker: Order. The hon. Gentleman has excellent parliamentary manners and has been here a long time. He should not try an extension of Question Time on me. He seeks a further explanation. That should not be addressed to the Chair. I have heard enough of that and I have answered the hon. Gentleman correctly.

Mr. Graham Riddick: On a point of order, Madam Speaker. You will remember that yesterday the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) raised a point of order on a matter which involved my hon. Friend the Member for Sheffield, Hallam (Mr. Patnick). I gave the hon. Lady notice that I intended to raise the matter now. I seek your guidance. Before a packed House and on live television, the hon. Lady made allegations about my hon. Friend, suggesting that my hon. Friend had acted improperly. My hon. Friend wrote to the hon. Member for Hillsborough denying the allegations

that she made in the House yesterday afternoon, and totally refuting the claim that my hon. Friend presented a petition at No. 10 Downing street.

Madam Speaker: Order. Is that a point of order for me?

Mr. Riddick: It is indeed. It is important that the record be put straight, and I want to ask you, Madam Speaker, how we can prevent such abuse of the procedures of the House.

Several Hon. Members: rose—

Madam Speaker: Order. I have the perfect answer—right hon. and hon. Members can behave in a courteous and civilised way to one another.

Mr. Riddick: rose—

Madam Speaker: Order. I heard the hon. Gentleman's point of order, and it is on the record. I will not take any retrospective points of order. That matter is finished with.

Mr. Paul Flynn: On a point of order, Madam Speaker. I appeal to you as the defender of the rights of Back Benchers. In a letter of 19 April, I raised a certain matter with the Secretary of State for Trade and Industry, and did so again in questions to him and to other Secretaries of State on 3 February, 18 February, 14 May, 18 May, 19 May, and 22 May. Answering the first question on the Order Paper today, the Minister for Trade claimed that he was ignorant of the matters in question, and contemptuously gave me his telephone number—suggesting that I had not carried out my job in raising the matter. Will you, Madam Speaker, instruct Ministers that when right hon. and hon. Members raise intelligent questions, they should receive serious answers?

Madam Speaker: Ministers are responsible for the answers that they give, and that matter is not for the Chair.

Several Hon. Members: rose—

Madam Speaker: Is there another point of order. Yes —I thought as much. Mr. Skinner.

Mr. Dennis Skinner: On a point of order, Madam Speaker. At the end of the day, you, Madam Speaker, have something to do with questions to Ministers, because you decide whether or not they are in order. We could be placed in some difficulty in the near future because, according to some reports, at least two Cabinet Ministers—the Secretary of State for Social Security and the Chief Secretary to the Treasury—are holding secret meetings. May we know the precise moment that they get the sack so that we may table our questions to the correct Minister? We want to know who is to answer them. May we be informed?

Madam Speaker: I am sure that the hon. Gentleman is always most capable of addressing his questions to the correct Minister.

Mr. Derek Enright: On a point of order, Madam Speaker. On much the same subject—[HoN. MEMBERS: "It has been answered."] It is a totally new point of order.

Madam Speaker: Then I need to hear it very rapidly.

Mr. Enright: At the beginning of May, I tabled a written question to the President of the Board of Trade. By


19 May, the right hon. Gentleman replied that he would make an announcement shortly. Up to the present, no such announcement has been made. Is that not an abuse of the House?

Madam Speaker: I hardly think that matter is for the Chair. It is for Ministers to answer when questions are put to them.

BALLOT FOR NOTICES OF MOTION FOR 26 JUNE

Members successful in the ballot were:

Mr. Barry Field
Mr. Dennis Skinner
Lady Olga Maitland

Oral Answers to Questions — BILLS PRESENTED

LOCAL. GOVERNMENT (OVERSEAS ASSISTANCE)

Mr. Jim Lester, supported by Sir Michael Marshall, Mr. Peter Bottomley, Mr. David Knox, Mr. Colin Shepherd, Dr. Michael Clark, Dr. Keith Hampson, Mr. Tim Rathbone, Mr. Bowen Wells, Mr. John Bowis, Sir David Steel and Mr. Andrew Smith, presented a Bill to enable local authorities in Great Britain to provide advice and assistance as respects matters in which they have skill and experience to bodies engaged in local government outside the United Kingdom; And the same was read the First time; and ordered to be read a Second time upon Friday 11 December 1992 and to be printed. [Bill 12.]

OSTEOPATHS

Mr. Malcolm Moss, supported by Mr. David Atkinson, Mr. Sebastian Coe, Mr. Alan Duncan, Sir Anthony Durant, Mr. Frank Field, Dr. Liam Fox, Mr. Jerry Hayes, Ms. Liz Lynne, Mrs. Marion Roe, Mr. Peter Thurnham and Mr. John Townend, presented a Bill to establish a body to be known as the General Osteopathic Council; to provide for the regulation of the profession of osteopathy, including making provision as to the registration of osteopaths and as to their professional education and conduct; to make provision in connection with the development and promotion of the profession; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 15 January 1993 and to be printed. [Bill 13.]

SHOPS (AMENDMENT)

Mr. Ray Powell, supported by Mr. Patrick Cormack, Mr. Donald Anderson, Mr. Alfred Morris, Mr, Michael Lord, Mr. Malcolm Thornton, Mrs. Ann Winterton, Mr. Stuart Bell, Mr. Alun Michael, Mr. Michael Alison, Mrs. Gwyneth Dunwoody and Mr. A. J. Beith, presented a Bill to provide for a general prohibition on the opening on Sunday of shops for retail trade or business; to make provision for the registration with the local authority of certain specific categories of shops which are to be permitted to open on a Sunday; to make provision for certain exempt categories of shops which will be permitted to open on a Sunday without prior registration; to make provision for the payment of fees for registration; to provide for the protection of persons employed in or for the purpose of a shop which is to be permitted to open on a Sunday; to make consequential amendments to and repeals in the Shops Act 1950; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 January 1993 and to be printed. [Bill 14.]

FREEDOM AND RESPONSIBILITY OF THE PRESS

Mr. Mark Fisher, on behalf of Mr. Clive Soley, supported by Mr. Nick Raynsford, Mrs. Angela Eagle, Mr. Chris Smith, Ms. Harriet Harman, Mr. Bruce Grocott, Ms. Glenda Jackson, Mr. Charles Kennedy, Mr. Jeff Rooker, Mr. Andrew F. Bennett and Ms. Clare Short, presented a Bill to require newspapers to present news with due accuracy and impartiality; to secure the free dissemination of news and information in the public interest; to prescribe certain professional and ethical standards; to make provision with respect to enforcement, complaints and adjudication; and for connected purposes:


And the same was read the First time; and ordered to be read a Second time upon Friday 29 January 1993 and to be printed. [Bill 15.]

CARAVAN SITES (AMENDMENT)

Mr. Cranley Onslow presented a Bill to amend Part II of the Caravan Sites Act 1968; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 5 February 1993 and to be printed. [Bill 16.]

REPRESENTATION OF THE PEOPLE (AMENDMENT)

Mr. Harry Barnes, supported by Mr. Richard Shepherd, Mr. David Alton, Mrs. Margaret Ewing and Mr. Dafydd Wigley, presented a Bill to amend the law relating to the compilation and publication of electoral registers and the powers and duties of electoral registration officers; to require the publicising of certain matters; to require improved physical access to polling stations; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 12 February 1993 and to be printed. [Bill 17.]

RIGHT TO KNOW

Mr. Mark Fisher, supported by Mr. Jeff Rooker, Ms. Clare Short, Mr. Chris Smith, Mr. Alistair Darling, Mr. Dafydd Wigley, Mrs. Margaret Ewing, Mr. Seamus Mallon, Mr. Archy Kirkwood, Mr. Clive Soley, Miss Emma Nicholson and Mr. Teddy Taylor, presented a Bill to establish a general right of access to official records for members of the public subject to certain exemptions; to provide for the correction of inaccurate official records; to provide for individuals to be notified of the availability of benefits in certain circumstances; to establish a right of access by individuals to their employment records subject to certain exemptions; to provide for the enforcement of these provisions; to amend the Companies Act 1985 with respect to the disclosure of certain information in the directors' report; to repeal the Official Secrets Act 1989 and replace it by new provisions; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 19 February 1993 and to be printed. [Bill 18.]

ROAD TRAFFIC (DRIVING INSTRUCTION BY DISABLED PERSONS)

Sir John Hannam, supported by Mr. Alfred Morris, Mr. Dafydd Wigley, Mr. Peter Thurnham, Ms. Liz Lynne, Mr. Gordon McMaster, Mr. Malcolm Thornton, Mr. lain Mills and Mrs. Angela Browning, presented a Bill to make provision for enabling persons with certain physical disabilities to be authorised, in certain circumstances, to give paid instruction in the driving of motor cars; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 11 December 1992 and to be printed. [Bill 19.]

MEDICINES INFORMATION

Mr. Giles Radice, supported by Ms. Hilary Armstrong, Mr. Alistair Darling, Mr. Nick Raynsford, Mr. Chris Smith, Mr. Archy Kirkwood, Mr. Jeff Rooker, Sir Richard Body, Mr. Jack Thompson and Ms. Tessa Jowell, presented a Bill to provide for the compilation and disclosure of information about medicinal products and related matters, subject to certain restrictions; to amend the Medicines Act 1968; and for connected purposes: And

the same was read the First time; and ordered to be read a Second time upon Friday 15 January 1993 and to be printed. [Bill 20.]

NOISE AND STATUTORY NUISANCE

Mr. Andrew Hunter, supported by Sir Nicholas Bonsor, Mr. Michael Brown, Mr. Terry Dicks, Mr. David Evenett, Mr. Roger Knapman, Mr. Michael Lord, Mr. Paul Marland, Mr. David Nicholson, Mr. J. F. Pawsey, Mr. Richard Shepherd and Mr. John Watts, presented a Bill to make provision for noise in a street to be a statutory nuisance; to make provision with respect to the operation of loudspeakers in a street; to make provision with respect to audible intruder alarms; to make provision for expenses incurred by local authorities in abating, or preventing the recurrence of, a statutory nuisance to be a charge on the premises to which they relate; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 January 1993 and to be printed. [Bill 21.]

SEXUAL OFFENCES

Mr. Jerry Hayes, supported by Mr. Roger Sims, Mr. Gerald Bermingham, Mr. Stephen Day, Mr. Eric Pickles and Mr. John Bowis, presented a Bill to abolish the presumption of criminal law that a boy under the age of fourteen is incapable of sexual intercourse: And the same was read the first time; and ordered to be read a Second time upon Friday 29 January 1993 and to be printed. [Bill 22.]

PENSIONS

Mr. Bill Michie, supported by Ms. Dawn Primarolo, Mr. Jimmy Boyce, Mr. Kevin Hughes, Mr. Michael Clapham, Mr. Richard Caborn, Mrs. Alice Mahon, Ms. Helen Jackson, Mr. Jeremy Corbyn, Mr. Harry Barnes, Mrs. Audrey Wise and Mr. Dennis Skinner, presented a Bill to amend the law relating to occupational and personal pension schemes; to provide for the appointment of trustees by scheme members; to provide greater protection for the interests of scheme members; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 5 February 1993 and to be printed. [Bill 23.]

EMPLOYMENT PROTECTION (PARENTAL LEAVE)

Mr. Greville Janner, supported by Mrs. Margaret Beckett, Mrs. Anne Campbell, Mrs. Gwyneth Dunwoody, Mrs. Llin Golding, Ms. Harriet Harman, Mrs. Glenda Jackson, Ms. Tessa Jowell, Mrs. Jane Kennedy, Ms. Marjorie Mowlam, Mrs. Barbara Roche and Ms, Clare Short, presented a Bill to provide that parents shall have the right to a maximum of three months' leave in respect of the birth of their child or children; to permit that leave to be apportioned between those parents as they decide; to give similar rights to grandparents and other close relatives in certain circumstances; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 12 February 1993 and to printed. [Bill 24.]

SHOPS

Mr. James Couchman, supported by Mr. John Marshall, Mr. Alan Haselhurst, Mr. Simon Coombs, Mr. John Ward, Mr. Nick Harvey, Ms. Janet Anderson, Mr. Richard Alexander, Dr. Keith Hampson and Sir George Gardiner, presented a Bill to repeal the Shops Act 1950; to


make provision with regard to the opening hours of shops on Sundays; to make provision as to the rights of persons employed in or for the purposes of a shop which is open on Sundays; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 January 1993 and to be printed. [Bill 25.]

OCCUPATIONAL PENSIONS

Mr. Andrew Miller, supported by Mr. Nick Raynesford, Mr. Frank Field, Mrs. Jane Kennedy, Ms. Helen Jackson, Ms. Ann Coffey, Ms. Janet Anderson, Mr. Greg Pope, Mr. Tony Lloyd, Mr. Andrew F. Bennett, Mr. Bryan Davies and Ms. Angela Eagle, presented a Bi11 to protect the interests of, and extend new rights to, members of occupational pension schemes in the event of changes in company ownership; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11 December 1992 and to be printed. [Bill 26.]

LICENSED PREMISES (EXCLUSION OF CERTAIN PERSONS) (AMENDMENT)

Mr. James Hill, supported by Sir Anthony Grant, Sir John Hunt, Sir Dudley Smith, Mr. David Young, Mrs. Angela Knight, Mr. Doug Hoyle, Mrs. Llin Golding, Mr. Ralph Howell, Mr. Bob Litherland and Mr. Lawrence Cunliffe, presented a Bill to amend the Licensed Premises (Exclusion of Certain Persons) Act 1980: And the same was read the First time; and ordered to be read a Second time upon Friday 15 January 1993 and to be printed. [Bill 27.]

HEDGEROWS

Mr. Peter Ainsworth, supported by Mr. Sebastian Coe, Mr. John Whittingdale, Mr. Alan Duncan, Mr. Harry Greenway, Mr. Eric Pickles, Mr. Nigel Waterson, Mr. John Ward, Mr. James Clappison, Mr. David Willetts and Mr. John Bowis, presented a Bill to make provision about

hedgerows: And the same was read the First time; and ordered to be read a Second time upon Friday 22 January 1993 and to be printed. [Bill 28.]

MERCHANT SHIPPING (REGISTRATION ETC.)

Mr. Richard Page, supported by Mr. David Harris, Mr. Patrick Thompson, Mrs. Elizabeth Peacock, Mr. Peter Atkinson and Mr. Michael Wood, presented a Bill to amend and restate the law relating to the registration of ships and related matters, to make provision in relation to ships on bareboat charter and to make amendments designed to facilitate, or otherwise desirable in connection with, the consolidation of the enactments relating to shipping and seamen: And the same was read the First time; and ordered to be read a Second time upon Friday 19 February 1993 and to be printed. [Bill 29.]

CHRONICALLY SICK AND DISABLED PERSONS (AMENDMENT)

Dr. Roger Berry, supported by Mr. Alfred Morris, Sir Richard Body, Mr. David Hinchliffe, Sir John Hannam and Mr. John Bowis, presented a Bill to amend the Chronically Sick and Disabled Persons Act 1970 and the Chronically Sick and Disabled Persons (Northern Ireland) Act 1978 to require the provision of day and respite care to people with disabilities: And the same was read the First time; and ordered to be read a Second time upon Friday 5 February 1993 and to be printed. [Bill 30.]

DAMAGES (SCOTLAND)

Mr. Brian Wilson, supported by Mr. Tam Dalyell, presented a Bill to clarify and amend the law of Scotland concerning the right of certain relatives of a deceased person, and the right of executors, to claim damages in respect of the death of the deceased from personal injuries; to make provision regarding solatium where personal injuries result in loss of expectation of life; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 12 February 1993 and to be printed. [Bill 31.]

Ways and Means

Madam Speaker: Shall I put the motions together?

Mr. A. J. Beith: I was proposing to speak on motion No. 5, unless the motions are taken together for the purposes of the debate.

Madam Speaker: I will therefore put the first four motions together.

DISTRIBUTIONS

Resolved,
That provision may be made as to whether any interest or other distribution paid after 14th May 1992 is a distribution for purposes of the Corporation Tax Acts.—[Mr. Dorrell].

DOUBLE TAXATION: INTEREST

Resolved,
That provision may be made about the construction of arrangements under section 788 of the Income and Corporation Taxes Act 1988 as regards interest paid after 14th May 1992—[Mr. Dorrell.]

FOREIGN EARNINGS

Resolved,
That provision may be made for the year 1992–93 and subsequent years of assessment in relation to foreign earnings.—[Mr. Dorrell.]

DEDUCTIONS ON ACCOUNT OF PAYMENTS

Resolved,
That provision may be made for the year 1992–93 and subsequent years of assessment in relation to deductions on account of annuities and other annual payments.—[Mr. Dorrell.]

Companies carrying on life assurance business

Motion made, and Question proposed,
That provision (including provision having retrospective effect) may be made about companies carrying on life assurance business.—[Mr. Dorrell.]

Mr. Beith: I suppose I am not surprised that the Government did not see fit to move Ways and Means Resolution No. 5 because it is another of their regular adventures into retrospection, of which the Finance Bill has a considerable quotient this year. The hon. Member for Eltham (Mr. Bottomley) raised a point of order at the end of Question Time and obliquely referred to another such matter. Ways and Means Resolution No. 5 states specifically
That provision (including provision having retrospective effect) may be made".
The Government arc seeking to make retrospective provision for the taxation of life assurance companies. The Government's justification for that—it is one of their customary ones—is that, in doing so, they will cause the law to conform to what people thought it was. They will be able to pre-empt the outcome of the judicial proceedings in which some life assurance companies arc engaged. The Revenue fears that it will lose the appeal and must therefore make some provision to fend off that possibility.
The House should not ever engage in retrospective legislation without the most careful assessment of whether it is desirable. These clauses were not in the Bill when it

was first published but were added as a sudden afterthought. That is why there is a Ways and Means resolution about them.
If the taxpayers charter is to mean anything as part of the citizens charter apparatus, the right to challenge the Revenue's interpretation of the law must be a real right. Every time that a taxpayer, whether corporate or individual, succeeds in such a challenge, thereby casting doubt on whether the Revenue's interpretation can be sustained up to the highest courts in the land, why should Parliament leap in before the judicial process is complete to return the law to the position that the Revenue thought it was or wanted it to be? What does the Minister with responsibility for the public services think about the Inland Revenue's apparently insatiable appetite for retrospective legislation?
There is a great deal of uncertainty about the facts leading to the Ways and Means resolution. The Inland Revenue claims that the cost of not bringing it in might be £450 million in 1992–93 and a further £100 million in subsequent years. That figure is strongly disputed by the Association of British Insurers which is not aware of claims that would add up to that amount.

Mr. Paul Boateng: How very surprising.

Mr. Beith: I note the hon. Gentleman's eager intervention. Traditionally no party has been more enthusiastic about retrospective legislation than Labour. That is why the hon. Gentleman is so keen to support the Government on this issue. The Opposition are ready to let the Government get away with it. They do not ask questions about it and I feel that they would prefer the questions not to be answered.

Mr. Dennis Skinner: I support retrospective legislation when it is about working class people. Perhaps the hon. Gentleman was not here in 1974 when retrospective legislation was used in connection with Lord Winstanley, at that time the Member for Hazel Grove, who had taken an office of profit under the Crown. He was due to be expelled from Parliament for breaking the law. Retrospective legislation was used to save the neck of a Liberal Member of Parliament. Every Liberal Member supported that legislation.

Mr. Beith: What is more, it was debated at the time so that the House could consider whether there was a reasonable case for saying that Lord Winstanley held an office of profit under the Crown. The hon. Gentleman should know because he took part in the debate. We should not make retrospective provision without first considering whether the case is justified.
The hon. Gentleman speaks about life insurance as if the working classes have no interest in it, but they have an abiding interest. Many people hold insurance policies and depend upon pension funds for retirement, not least, of course, the funds that were administered by a former Labour Member of Parliament whom no Labour Member appears prepared to admit ever having met. Pensions and life insurances are bound up in financial institutions on which working people depend for their security in retirement. When considering whether a series of life insurance companies should pay millions in tax, we are considering whether those who pay the premiums to those companies should pay that tax through the premium. Let us allow no further currency for the notion that the


institutions that hold the savings of ordinary British people are somehow remote and of no interest. Their fate is bound up with that of those who put their money in pensions or life insurance.

Mr. Nicholas Winterton (Macclesfield): The hon. Gentleman spoke about policy holders. Does he suggest that they will suffer and be disadvantaged by the resolution?

Mr. Beith: Yes, that is precisely my argument. The costs of the companies concerned will rise and almost certainly policy holders' premiums will rise as a result. The argument is about the relative effect on policy holders and taxpayers in general.
The issue of principle is whether retrospection is justified. If the argument for retrospection is so strong, I wonder that it did not occur to the Government earlier. If in later stages in the consideration of the Finance Bill Ministers tell Opposition Members that their amendments would not have the desired effect or that they are incorrectly drafted, we shall receive that advice with wry amusement. There must have been a series of incorrect Inland Revenue draftings and repeals that led the law to be in a very different state from that which the Government imagined.

Mr. Bob Cryer: Will the hon. Gentleman give way?

Mr. Beith: I shall give way for the last time before I invite the Minister to tell us a little more about the matter.

Mr. Cryer: Does the hon. Gentleman accept that when Conservative Members were in opposition and the Clay Cross issue arose they were opposed to retrospection? It seems, however, that they have shifted their ground. For example, during the general election, the Government tabled a statutory instrument—it came into force on 28 March—that gave tax concessions. It was a retrospective measure for Lloyd's underwriters that went back to 1988–89.

Mr. Beith: I am grateful to the hon. Gentleman for drawing my attention to another example of retrospection. Every piece of retrospective legislation should be examined carefully, and that is why I took the view that the resolution should not go through on the nod.

Mr. John Greenway: As chairman of the all-party insurance and financial services group, of which the hon. Member for Berwick-upon-Tweed (Mr. Beith) is one of the much valued vice-chairmen, I wish to take up a position that I suspect will be somewhere between the one that he has outlined and the stance that I suspect will be taken by my hon. Friend the Financial Secretary when he replies to this brief debate.
It would be wrong to give the impression that life assurance policyholders throughout Britain will suffer irrevocably if the resolution is approved by the House. I understand that only two—albeit very large—composite insurance companies are affected by the measure. The Government are attempting to put the law on all fours with their expectation of what it would be when the arrangements for the reform of the taxation of life assurance were approved by the House two or three years ago.
It seems that two principles are at stake, both of which concern some of us. I imagine that we shall want to listen carefully to my hon. Friend the Financial Secretary's reply, but however we choose to vote on the issue the two principles will rest heavily in our minds.
The first principle relates to a dispute between the two life assurance offices and the Treasury about the correct interpretation of the law. It might take several years for the matter to be fully resolved through the normal processes of legal challenge on taxation matters, for these processes can be drawn out. It must be right, therefore, to amend the law to incorporate what we intended three or four years ago when the new arrangements were introduced. The revenue that would be collected as a result of the arrangements that we thought we were making will not therefore be forgone.
My difficulty—I think that other hon. Members are in the same position—is in determining whether it is right for the change to apply retrospectively to matters that predated the Government's decision to change the law—in other words, retrospective legislation. One argument is that if we are to change the law, the change should have effect only from the date on which the Government signalled their intention to make it.
That brings me to my second difficulty and to the fulcrum of the argument. In responding to my first difficulty, I think that my hon. Friend the Minister will say that the Government signalled their intention to change the law in 1989 when we altered the arrangements for the taxation of life assurance companies. Nevertheless, we are again entering the difficult and highly emotive territory of retrospective legislation. Life assurance companies and the world of commerce generally would like to hear my hon. Friend define where the Government think that the line should be drawn: where retrospective taxation legislation is permitted, and where it is not?
We all understand that advice is given to taxpayers, whether they are ordinary members of the public, employees of firms or some of our largest corporations. That advice is always given in good faith on an interpretation of the tax laws which can be finalised only through the courts. That brings me back to my first point, which is to ask my hon. Friend to tell the House this afternoon why he thinks it is better for the House to decide that it knows best, whatever the courts may think of the claims of two companies against the Treasury, and to confirm that we should ensure that there is no prospect of the Exchequer losing any revenue as a result of the two challenges.

Mr. Cryer: On a point of order, Madam Speaker. This is an insurance issue and a number of hon. Members, including the hon. Member for Ryedale (Mr. Greenway), are paid employees of insurance brokers or insurance organisations. Whatever their point of view, they should make that clear. The rules state categorically that if an hon. Member thinks that he has a financial interest, he should make it clear.

Madam Speaker: The hon. Gentleman is correct. If there is any financial interest at all, I am sure that hon. Members will make it clear.

Mr. Greenway: Further to that point of order, Madam Speaker. I prefaced my remarks by pointing out that I am chairman of the all-party insurance and financial services group, to which representations on this issue were made some three weeks ago at a meeting attended by some


Opposition Members. I have no interest to declare in the matters that I have discussed this afternoon other than the interest that we all have, given our rights and responsibilities as Members of Parliament, to protect consumers and our constituents.

Mr. Cryer: Further to that point of order, Madam Speaker. The hon. Member for Ryedale is parliamentary adviser to the Institute of Insurance Brokers, which would seem to bring him within the terms of the resolution passed by the House which states that a financial interest should be declared. There is a clear connection, and it is the advice of the Clerk of the House that where there is any doubt it is safest to declare an interest.

Madam Speaker: The Register of Members' Interests is one thing, but the declaration of an interest in the subject matter before us is another. I think that the hon. Member for Ryedale (Mr. Greenway) is correct.

Mr. Peter Bottomley: The hon. Member for Berwick-upon-Tweed (Mr. Beith) has raised a serious point. Even if Parliament approves retrospective or retroactive legislation, it should not let it go through on the nod without explanation. There is clearly no problem if the House assents to retrospective legislation that gives people something, but there should be more care when such legislation takes something away.
We depend on the rule of law and the rule of Parliament and, as you said in your ruling on my point of order, Madam Speaker, it is within the power of the House to legislate to overrule private interests, whether of individuals or organisations, in matters that are before the courts. However, the Boulton edition of "Erskine May" says that that power should be used sparingly in criminal cases. In civil cases, the law is plain, and I am grateful to you, Madam Speaker, for spelling it out to the House. However, I hesitate to go as far as Sir Robin Maxwell-Hyslop would have done on the hybridity question.
The difficulty is that in an insurance-linked case, similar to that of the building societies' transitional arrangements for composite tax, those who work within the Revenue and the Treasury have to be far-sighted in assessing the law and proposing clauses in Finance Bills which, once enacted, with or without amendment, are watertight. The problem is that there are clever people outside the Revenue in commercial and insurance companies and building societies who look for gaps or overlaps in the law.
It is reasonable for Treasury Ministers to come back to the House of Commons and openly say that they believe that the law is in doubt or wrong and that they want Parliament to consider the matter and to make a change. Like my hon. Friend the Member for Ryedale (Mr. Greenway), I look forward to hearing my hon. Friend the Minister explain what is behind resolution No. 5.
The Minister's explanation will be based on information from the Inland Revenue, which itself is sometimes based on anticipation of what a court may decide—or on an attempt to interpret what a court has already decided, which is not always entirely clear. Problems arise when the consequences are not spelt out to the House. I hope that, in the case of life assurance companies and taxation, we

will not be faced with a difference of view and perspective between the Inland Revenue and the Treasury on one side and affected corporate bodies such as insurance companies and building societies on the other.
The saga of clause 52 is not about to end. The problem there was that the Treasury was looking at the cash flow to Government and saying that there was a net cost to Government, while a number of building societies were saying that, because the end of the financial year coincided with the transitional arrangements, they were paying tax for a period in relation to which they had already satisfied the Revenue's demands.
I shall not go into detail, but I feel that my hon. Friend the Minister must try to explain whether it is fair and reasonable to establish certainty in regard to insurance company taxation. Perhaps he will also consider whether we are faced with the "sledgehammer and nut" problem that applies to clause 52. It may be necessary to protect £15,000 million that is at risk, but that need not mean eliminating the taxpayer's chance to establish a £57 million case, or a £100 million case. That represents less than 1 per cent. of the sum that the Opposition seem to think is perfectly reasonable. I might agree in relation to the £15,000 million level, but not in relation to the £57 million.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell): A point that is not in dispute is that, if any proposal for retrospective legislation comes to the House, every individual Member of Parliament should examine it carefully. The burden of proof on anyone who proposes such legislation is very heavy. I do not disagree with any of the hon. Members who have spoken about that. I also want the House to be clear about the precise nature of the debate, and the consequences of approving the resolution—if, indeed, the House approves it.

Mr. Cryer: The Minister is right to emphasise the importance of the issue of retrospective legislation. Can he assure me that, if a prayer is tabled against a statutory instrument that gives retrospective facilities to members of Lloyd's for 1988–89, he will treat the matter sympathetically and encourage the Government to provide time for a debate on the Floor of the House?

Mr. Dorrell: I shall certainly consider the hon. Gentleman's request. I would consider any case that he put to me in writing equally carefully.

Mr. Ian Taylor: I think it important to make a point about retrospective legislation in respect of Lloyd's. I stress that I have no interest to disclose.
Lloyd's legislation specifically recognises the existence of a different accounting basis. That is recognised in the Lloyd's Act—

Madam Speaker: Order. That is not at all relevant to our present debate.

Mr. Dorrell: Let me remind the House of the precise nature of the decision that it is now being asked to make. It is being asked not to approve a clause tabled for consideration in Committee but simply to provide a Ways and Means resolution so that the Committee can— within the rules of order—consider whether a retrospective clause should be written into the Finance Bill. I suggest that the proper time at which to consider the detail of the issue is on clause stand part, during the Committee stage.


Let me briefly sketch in the background to the clause, and explain why the Government are "leaping in"—to use the phrase employed by the hon. Member for Berwick-upon-Tweed (Mr. Beith). There are three salient points. First, there is the need for clarity. As my hon. Friend the Member for Ryedale (Mr. Greenway) reminded the House, if the judicial process is to be carried to its conclusion—that could take several years, and substantial sums are at stake for the life assurance industry—clarity is a relevant consideration.
Secondly, there is the need to avoid capricious distribution of benefit— not, as the hon. Member for Berwick-upon-Tweed said, between policyholders in particular and taxpayers in general but between one group of policyholders of one life house and another group of policyholders of another life house. The House should be aware that the dispute underlying the resolution arises because, although ever since the legislation was put on the statute book in he first world war we have collected tax on investment returns of life houses that are making trading loss, it is now being argued that the statutory basis on which that tax has been collected is wanting. This is not an example of new legislation not having the meaning that was originally intended. We have several decades of experience of having collected tax from life houses that have been in precisely the position of those who are now arguing that tax is not payable.
If that case were allowed to continue and no retrospective legislation were introduced, policyholders of houses that made a trading loss would receive an enormous tax windfall, which would not be available to policyholders of life houses that did not make a trading loss. Substantial sums would be distributed on an entirely capricious basis, which the House would not wish.
The third consideration is that, as the hon. Member for Berwick-upon-Tweed properly said, £450 million of revenue is at stake. Although that is not a decisive argument, it is relevant to whether, in this tax year, the House wants to see that amount of money made available on the capricious basis that I have described.

Question put and agreed to.

Resolved,
That provision (including provision having retrospective effect) may be made about companies carrying on life assurance business.

Orders of the Day — Finance Bill

(Clauses 19 and 20)

Considered in Committee.

[MR. MICHAEL MORRIS in the Chair]

Ordered,
That the order in which proceedings in Committee of the whole House on the Finance Bill are to be taken shall be Clause 20 and Clause 19.—[Mr. Dorrell.]

The Chairman of Ways and Means (Mr. Michael Morris): Before we consider clause 20, I note that three hon. Members wish to make their maiden speeches. I respectfully point out that, although it is entirely appropriate that they should refer to their constituencies and to former Members, they must address their more general remarks to the specific clauses and amendments.

Clause 20

SMALL COMPANIES

Question proposed, That the clause stand part of the Bill.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell): The purpose of the Bill is to set the small company rate of corporation tax for the year 1992–93. As the House will be aware, clause 20 puts into effect the announcement that my right hon. Friend the Chancellor made in his Budget statement: that for the current financial year the small company rate should continue at the same rate as it has been for a number of years—25 per cent. on the first £250,000 of taxable profit, and a marginal rate of 35 per cent. for profits between £250,000 and £1,250,000. The average rate on profits of more than £1¼ million is 33 per cent.
The clause continues the policy that the Government have espoused since 1983 of aligning the standard rate of income tax with the small company rate of corporation tax. We believe that the policy achieves fairness between small companies, personal traders and partnerships. It reflects our belief that the small business sector should be encouraged because great economic benefits, both short and long term, flow from it.
The House might be interested to know that, among the companies which pay corporation tax, 300,000 out of a total of 380,000 now fall within the 25 per cent. band—in other words, they make profits of less than £250,000. It is a rate from which a large number of small businesses benefit and it reflects our continuing emphasis on the importance of ensuring a low marginal rate of tax on wealth creation in order to provide a proper incentive and reward for the wealth-creation process. The small companies' rate of tax is one of the clearest examples of the progress that the Government have been able to make since 1979 in the desire for a reduction in the marginal rate of tax and the encouragement of the wealth-creation process.
In 1979, the small companies' rate of corporation tax stood at 42 per cent. We have now reduced it to 25 per


cent. Furthermore, in 1979 the limit above which the tax rate started to rise was profits of £70,000. If one made profits of more than £70,000 in 1979, one no longer benefited from the full small companies' rate but was moving towards the full main corporation tax rate of 52 per cent. The £70,000 limit has risen to the current level of £250,000 and the small companies' corporation tax rate has fallen from 42 per cent. to 25 per cent.
The clear result, of which the House should take due cognisance, is a more vibrant and vigorous small business sector. The effect has been to create more new businesses and jobs and a small business sector which is a more vibrant part of the economy than it was 15 years ago. Since 1979, 400,000 more businesses have been created and become active. There are now, on average, 610 more businesses in every constituency than in 1979. I strongly believe that that is the result of the more benign environment created by the Government.

Mr. A. J. Beith: Before the Financial Secretary gets carried away by the compelling effect of the small companies' rate of corporation tax, which I support, I hope that he will recognise that only 335,000 companies pay corporation tax compared with 1.7 million which pay value added tax. Therefore, although the clause is important, it will benefit only a minority in the small business sector.

Mr. Dorrell: I recognise that it is a minority of the total, but the small companies' rate of corporation tax is an important part of the total package of tax and other incentives available to the small business sector. What we did during the 1980s, and on which we must build in the 1990s, is to ensure that our tax and regulatory regime properly considers the interests of the small business sector because it is from that sector that the big and successful businesses of the future grow.
Clause 20 is an important part of our total commitment to improving incentives and rewards within the small business sector, and I commend it to the House.

Mr. Chris Smith: As this is the first opportunity that I have had, I begin by welcoming you, Mr. Morris, to your post. Three Members of the House are former councillors of the London borough of Islington—you and I happen to be two of them. Two Members of the House happen to be former chairmen of housing in the London borough of Islington—again, you and I are those two hon. Members. It therefore gives me particular pleasure to welcome you to the high office that you now hold.
As the Financial Secretary outlined, clause 20 sets the small companies' rate of corporation tax at the same level as last year. We have no quarrel with the clause, although the picture that the Financial Secretary painted of the average number of additional businesses which have mushroomed in all our constituencies must be set beside the additional number of business liquidations which have also mushroomed in our constituencies. The additional number of unemployed people has become all too evident in our constituencies in the past two years.

Mr. Dorrell: For the sake of clarity, I should explain that the figure that I gave is net of closures. It refers to new businesses operating today, compared with the number operating in each constituency in 1979.

Mr. Smith: I appreciate that point, which is frequently made by Ministers, but they fail to understand that the number of people without jobs and claiming benefit has risen inexorably over the past two years, and Government policies are doing nothing to assist that problem.
The Financial Secretary spoke warmly about the fact that the Government have aligned the small companies' rate of corporation tax with the standard rate of income tax. What do they intend to do about the new 20 per cent. band of income tax? It appears to be their intention, difficult though it will be to achieve, to expand the 20 per cent. band until it caters for a larger number of people than the standard rate band. What will they then do about the small companies' rate of corporation tax? It would be interesting to hear their forward thoughts on that.
Although we have no quarrel with the 20 per cent. figure in the clause, we must place it on record that the Government should be taking many other steps to assist small businesses. I will mention just two for starters. First, there should be a root-and-branch reform of the uniform business rate. The suspending measure that the Chancellor announced in the Budget was helpful, but it went nowhere near far enough to alleviate the difficulty that the uniform business rate is causing to small businesses. Secondly, there must be more effective measures than the paltry steps announced in the Budget to tackle the problem of late payment of bills, especially by large companies to small companies. For instance, the Bill does not provide for a proper system of interest payments on outstanding bills.
We shall wish to return to those issues in the course of our discussion on the Bill. In the meantime, however, we are happy to see clause 20 make reasonably swift progress to the statute book.

Mrs. Judith Chaplin: I shall speak on clause 20 in a moment, but I should like first to go a little wider.
It is traditional in a maiden speech to praise one's predecessor, and I have listened with interest as my fellow new Members have praised—or even damned with faint praise— their predecessors, but no hon. Member who sat in the last Parliament would not join me in my admiration for the previous hon. Member for Newbury. Sir Michael McNair-Wilson had the unenviable distinction of being the first Member of this House to suffer kidney failure, undergo dialysis and, eventually, have a kidney transplant. Hon. Members will recognise how well he continued to perform his parliamentary duties, with enormous courage. I know from many examples how diligently he continued to serve his constituency, and many kidney patients know how well he turned his experiences of illness to bring them benefits and much better facilities. I know that Sir Michael would agree with me that he could not have done that without the support of his wife, so I am sure that all hon. Members will join me in wishing him continued improved health, and them both a long and happy retirement.
The Newbury constituency takes its name from the largest town within it. It is a large constituency which stretches across the whole of west Berkshire—a beautiful area with many diverse activities. One of its most important industries is racing. Indeed, the highlight of the


election campaign and of "party politics" there was unrelated to any candidate—when the horse of that name romped home in the Grand National to the extreme benefit of many of my betting constituents.
The racing industry is important. It employs enormous numbers of people not only in the stables but on the courses and in the betting shops. I welcome the announcement in the Budget that betting duty is to be cut so that £15 million can be redirected to helping this important industry. Nevertheless, the industry continues to face a substantial problem in that the value added tax at 17.5 per cent. levied on the sale of racehorses here is much higher than in France or Ireland and there may well be a real danger of auctioneers, breeders and perhaps even trainers going overseas. In the past, one of the arguments that the Government have deployed against tax harmonisation was that it removed their ability to reduce taxes in a competitive situation. This is exactly such a case. I hope that the Chancellor of the Exchequer will consider how to restore our competitiveness in this area.
Another important industry is the defence industry. The very names Aldermaston and Greenham common are synonymous with the protests of the past. Few now doubt that the protesters were wrong, that it was a strong defence policy which continued to bring the former Soviet Union back to the negotiating table, and that it was the siting of cruise missiles at. Greenham common which eventually led to the intermediate nuclear forces treaty and the abolition of a whole class of nuclear weapons. Now, the people of Newbury hope that it will not be long before Green ham common is common land once again and open to them all.
Perhaps what the Newbury constituency most exemplifies is the economic development of the 1980s. It stretches along the M4—the golden corridor—and has many young high-tech companies competitive with the best in the world. Many started as small businesses, with their founders putting capital and security at risk, and many have suffered hard in the current recession. It is important that the Government should do all that they can to restore confidence there and to help those companies begin to expand again.
I know that we have the lowest corporation tax in Europe, but other countries are bringing their rates down and we should stay ahead. As the hon. Member for Islington, South and Finsbury (Mr. Smith) said, it is to be hoped that we shall repeat that process and look to reduce company taxation in the same way as we have committed ourselves to reducing personal income tax.
The amount of corporation tax is a function of the profitability of a company, and estimates of future profitability affect companies' capital values. Businesses and farmers in my constituency welcome the proposed increase in inheritance tax relief on business assets to 100 per cent. Too often in the past firms have been damaged or even broken up in order to find liquid funds to pay the tax following an unexpected death—and death seldom comes at a convenient time for companies. That problem will now no longer occur.
That welcome change, however, could lead to an unwelcome consequence. Currently, if such assets are handed over during the donor's lifetime, capital gains tax is rolled over but not eliminated. The Finance Bill proposal may lead owners to hang on to their possessions until death to avoid capital gains tax on the increase in value of the assets, rather than handing them over at the best time for the development of that company. And who

can blame them? The vast majority of capital gains tax is paid each year by a relatively small number of people selling out of firms that they have built up at considerable risk and sacrifice to themselves. They resent paying the Government nearly half the increase in the value of their companies.
In the past few years, we have seen the risks to which such companies expose themselves. Those small companies, which are started up with very little capital, are the life blood of the economy. I hope that the Chancellor will reconsider the impact of this complex and distorting tax in terms of discouraging risk-taking in this country.
Previous Conservative Chancellors have been proud to abolish a tax each year. The present Chancellor has continued that admirable tradition with the proposed abolition of the matches and mechanical lighters duty in this year's Finance Bill, but there are many other, more important taxes that I could suggest as candidates for abolition. I hope that the Government will continue to be both a tax-reforming Government and a tax-cutting Government.

Mr. A. J. Beith: I congratulate the hon. Member for Newbury (Mrs. Chaplin) on a cogent and well-delivered maiden speech. Her enthusiasm for Finance Bill Committee work will already have been noted by the Whips, and she has shown herself well suited to such work. If she does not want to serve on the Standing Committee, she would be well advised to say quite soon that she does not agree with the building society provisions and proposes to vote against them in Committee. I fear that that is her only hope of escaping service on the Committee now that she has shown herself so well prepared for it.
We all appreciated the hon. Lady's tribute to her predecessor, who was held in very high regard in this place and whose health and recovery were a matter of great concern to hon. Members. There grew up around the Christian fellowship in the House much prayer and support for Michael McNair-Wilson and his wife during that time, through which they both came with marvellous courage. Many in the House will remember that experience and it will be one of the ways in which they remember Michael affectionately, too.
The clause relating to corporation tax and small business has to be seen in its proper perspective, which is that a large number of small businesses do not pay any corporation tax because they are not making enough money to do so. Many of them are victims of the recession and are hanging on desperately, and although they may be worried about a number of matters —about the uniform business rate and the impact that it had on them until this year's changes, about the VAT inspector and the burdens that he places upon them and about sorting out their employees' pay-as-you-earn—corporation tax is certainly not top of their anxiety list.
One of the striking things about the tax is that most of it is paid by a relatively few companies. Some 3,500 firms—1 per cent. of the total paying corporation tax—paid 70 per cent. of the total yield of the tax, and seven firms paid 10 per cent. of that yield. Looked at another way, that means that 99 per cent. of firms paying corporation tax contribute only 30 per cent. of the yield. It follows that the administrative costs of collecting corporation tax from small businesses are relatively high, and those costs fall not just on the Government but on business. That is an


argument for trying to keep small business out of the corporation tax net to a large extent, not by making it less profitable but by ensuring that the allowances and tax rates are conducive to the achievement of that end.
That is quite difficult. We cannot use the same allowance system as for personal taxation because if we did companies would simply subdivide themselves to maximise benefit from allowances. Although it is desirable to minimise the impact of corporation tax, we probably need to look to other instruments of small business taxation to give the help that the Minister seems to feel could be offered under the corporation tax provision.
The Minister cited the corporation tax rate as an example of the climate in which business operates. I understand his point, but other things will probably matter more to small businesses, one of which is obviously the uniform business rate. I welcome the changes to the uniform business rate, although we argued for going a little further than the Government. After his experiences in Bath, Mr. Chris Patten may, on reflection, be able to offer a little support for the change. The Bath experience is a good example of how the uniform business rate has hit large numbers of small businesses very hard in many parts of the country.
The tax burden on small business could be reduced in other ways and by a greater amount than through the proposals in clause 20. For example, if national insurance and income tax were integrated as systems, that would reduce the enormous administrative burden on business of running the two systems. The national insurance system imposes a kind of poll tax on business in the form of class 2 national insurance contributions which are a disincentive for the smallest businesses.
There are many opportunities for reforming the tax system to help the small business sector. Many of those opportunities lie in the administration of taxes that affect all small businesses. When judging whether the climate of taxation is as helpful to small businesses as it could be, I hope that Treasury Ministers will look far beyond corporation tax, welcome though that provision is.

Mr. Dorrell: I welcome the maiden speech of my hon. Friend the Member for Newbury (Mrs. Chaplin). Hon. Members on both sides of the House will have welcomed what she said about Michael McNair-Wilson. She was entirely right to stress his courage, which was displayed on many ocasions in the Chamber, and his effective advocacy of his constituents' interests. As a former Health Minister responsible for the transplant programme, I had good reason to know what an effective advocate he was of the interests of kidney patients. I endorse everything that my hon. Friend the new Member for Newbury said about the effectivenesss, courage and personal niceness of Michael McNair-Wilson.
I have a particular link with Michael McNair-Wilson because he was my immediate predecessor as Parliamentary Private Secretary to Peter Walker.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Nicholas Soames): And look where that got him.

Mr. Dorrell: Indeed, look where that got everyone.
Michael McNair-Wilson showed me the ropes and taught me how to be a PPS from behind.
My hon. Friend the Member for Newbury stressed the importance of the racing industry, which is of great interest to my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. I have noted her point about the need to ensure that the VAT charge paid by the racing industry is measured against a test of competitiveness, as well as a test of fairness, against other industries operating in this country.
My hon. Friend the Member for Newbury also reminded us, as I tried to do earlier, that the tax regime on small companies plays a vital role in the development of an effective free enterprise economy. She reminded us of the old aphorism that great oaks from little acorns grow and that, if we do not have fertile ground for the development of small business, we will not have the new businesses that become big businesses, such as those that now operate in her constituency and employ her constituents.
The point made by my hon. Friend the Member for Newbury about inheritance tax and the link with capital gains tax is well taken. If one wants to build a large company from a small business start, the year-by-year profit tax regime must be congenial to the growth of the small business and the tax system, as a whole, must also be congenial to the growth of small business.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) stressed that small company corporation tax is not the only part of the system that we must ensure is congenial to small business. I agree with that. A wide range of tax and other regulatory activities impinge on the activities of small business. We must ensure that all of them are as favourable as possible so that the ground is fertile for the growth of small business.
The hon. Member for Islington, South and Finsbury (Mr. Smith) asked about the link between small company corporation tax and the standard rate of income tax. As we develop our marginal rate policy at the bottom of the income tax scale, we will obviously need to review year by year how that impacts on small company corporation tax. But we have made it clear that it is our intention to reduce the standard rate of tax to 20 per cent. By implication and extension, we could therefore, on the basis of our record, assume that we would expect and hope to be able to do the same for small company corporation tax as well.
The hon. Gentleman argued for root-and-branch reform of the uniform business rate. It is not unfair to say that he did not sketch in enormous detail what he had in mind. It is difficult to react to proposals for root-and-branch reform without a slightly greater idea of it, fleshing out the grant strategy that he obviously has in his hidden agenda, but we shall seek to winkle it out to establish precisely what he has in mind.
The importance of ensuring that effective action is taken to encourage prompt payment and to discourage late payment of bills was addressed by my right hon. Friend the Chancellor in his Budget speech. We are addressing the matter through the Government's own contracts by ensuring that, when the Government sign a prime contract, we use that contractual mechanism to ensure that not only our own prime contractors but subcontractors pay their suppliers on time.
We are addressing the matter also, as my right hon. Friend the Chancellor announced in the Budget, through


a review of small claims recovery procedures to ensure that they are as effective, cheap, efficient and, perhaps most important, timely as possible.
The hon. Gentleman is on to a good point. We agree with him and we are taking action to ensure that words are turned into action.

Mr. Kenneth Purchase: What instruction has been given to health authorities in regard to the average number of days for payment of debt? When I served on a health authority, there was an implicit instruction to increase from 32 to 35 days the average time for discharging bills.

Mr. Dorrell: The policy of the national health service is very clear and has been laid out time and again in guidance to health authorities: health authorities should pay bills on time and should organise their affairs so that they have the resources to do that. Indeed, the Government backed up that policy with action during the previous public expenditure survey, when we provided £80 million to the national health service specifically to reduce the amounts outstanding by health authorities beyond the due date. We have not only made the guidance clear but provided real money to put health authorities in a position in which they can carry out that guidance. I commend the clause to the House.

Question put and agreed to.

Clause 20 ordered to stand part of the Bill.

Clause 19

CHARGE AND RATE OF CORPORATION TAX FOR 1992

Mr. Chris Smith: I beg to move amendment No. 2, in page 12, line 46, at beginning insert '(1)'.

The Chairman: With this it will be convenient to take amendment No. 4, in page 12, line 47, at end add—
`(2) Where a company whose activities consist—
(i) wholly or mainly in the manufacture of finished goods, partly finished goods or materials, and

Mr. Smith: The purpose of the amendments is to provide enhanced first year capital allowances for investment in plant and machinery by manufacturing industry. The debate takes place against a background of continued manufacturing decline in this country. For 13 years, our manufacturing sector has been neglected by a Government obsessed with the purported virtues of market forces and blind to the needs of a crucial part of our national economy. The devastation began in 1980 and 1981, when we lost a quarter of our manufacturing capacity, but the recession that we are still living through has compounded the problem.
As a country which once prided itself on being the workshop of the world, since 1979 we have seen our manufacturing performance slip to the bottom of the international league. We have performed worst out of all the OECD countries on manufacturing performance in recent years. From 1974 to 1978, manufacturing accounted for nearly 30 per cent. of our GDP. Last year, it was less than 22 per cent. Manufacturing is not the be-all and end-all of our economy, of course—the service sector remains every bit as important—but we ignore and neglect manufacturing at our peril. It is, and will always be, the principal internationally traded part of our economy. We

make and sell goods or we falter. The choice is entirely clear. It is just a pity that that cannot be recognised so readily on the Conservative Benches.
In 1983, for the first time since the industrial revolution, Britain imported more manufactured goods than we exported. Ever since that day, throughout the windfall of North sea oil, throughout—indeed, perhaps because of —the Lawson boom, and throughout the subsequent impact of recession, we have continued to be in deficit. That is the manufacturing background against which the debate takes place. That is the legacy of the Government's time hitherto in office.
If manufacturing output has performed poorly—we should remember that even the Government admit that it fell by 5.25 per cent. in 1991—the picture in manufacturing investment is even bleaker. In the past year, manufacturing investment fell by 11 per cent. At constant prices, there is less investment now than there was in 1979. What is worse, in every one of the eight years following 1979 there was less investment than there had been in 1979.
While competitor economies, especially in Europe and Japan, were increasing their investment performance, we reduced ours. That is no way to prepare our economy for the challenges of the single market. In the past two years, the picture has been similar. Only last week, the European Commission published comparative figures on investment performances in the various countries of the European Community. In terms of investment in equipment and looking at volume rather than merely value, they show a minus figure for investment in the United Kingdom in 1990—a decline of 3.8 per cent. The European average was a plus figure of 4.8 per cent.
In 1991, the picture was worse. There was a decline in the United Kingdom of 11.8 per cent. but a decline in the European average, which is sharply affected by the United Kingdom figure, of 0.5 per cent. The prediction for 1992 is a fall in the United Kingdom of 4 per cent. and a rise in the European average of 0.2 per cent. Those figures show clearly that, consistently in the past two years and into this year, we are performing substantially worse in manufacturing investment and equipment than the average—let alone the best—performers among our European partner countries. We were told by the Government in the Red Book published at the time of the Budget that the prospects for the rest of the year were for a further fall of 0.5 per cent. in overall investment.
Of course, we must note the Government's tendency to juggle with definitions of investment. At one moment, they will talk about overall investment in the economy, at the next moment they will talk about business investment, and at other times they will talk about manufacturing investment. As always, the Government carefully select their definitions to put the best possible gloss on their failures. However, even if we take the Government's favoured measure—overall investment—their prediction of a further decline of 0.5 per cent. this year is open to question. Let us consider the evidence. The Central Statistical Office published figures last Thursday predicting a 2 per cent. fall in the investment of British firms surveyed. There is no 0.5 per cent. there—a fall of 2 per cent. is predicted.
The first quarter survey by the Association of British Chambers of Commerce showed a 3 per cent. negative figure for intentions to invest in manufacturing plant and machinery—down from the 2 per cent. negative figure in the fourth quarter survey last year. The independent


averages compiled by the Treasury show a similar picture. The average of non-City, academic and institutional forecasts for the coming year shows an average decline of 1.5 per cent. in gross fixed investment. Only one out of the 12 institutions agrees with the Government that the fall is likely to be 0.5 per cent.
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According to 16 City firms surveyed in gathering independent forecasts, the picture there is even worse: they expect a decline of 2.3 per cent. in gross fixed investment. Out of 16, only two agree with the Government that the decline will be 0.5 per cent. or less.
What of the Government's position? We read with interest in The Daily Telegraph yesterday—not the source least likely to be favourable to the Government—a report which said:
The Treasury is to scrap its one per cent. growth forecast for 1992–93, following a poor first quarter and the absence of any evidence of any recovery since then … the Treasury team has cut its growth forecast to under ½ per cent.
If the growth forecast is being revised downwards, that obviously has immediate implications for output, unemployment, public sector finances, the public expenditure round and, most probably, investment levels.
We ought to be told in the clear light of day whether The Daily Telegraph report is correct. Have Treasury growth expectations been more than halved? What impact will that have and is it expected to have? I hope that the Financial Secretary will have the courage and decency to tell us when he replies to the debate.
Whichever way we look at it, the picture of manufacturing investment is far from healthy. It has fallen sharply in the past two years and is still falling. Our amendment seeks to reverse that decline. Investment is a crucial preparatory economic activity. If investment lags behind recovery and demand—worse still, if it does not respond to or predict a recovery in demand—the supply of goods will not be there, our dependence on imports will increase, and the imbalance between supply and demand will become even more severe.
Investment in manufacturing industry is vital now if we are to achieve anything like a sustainable recovery in the years to come. Enhanced capital allowances such as those proposed in our amendment would help enormously in stimulating investment. Our amendment is carefully targeted. It is aimed at manufacturing industry in particular, and specifically at plant and machinery. It raises the first year allowance, for a period of one year only, from 25 per cent. to 40 per cent. It would provide a direct incentive to firms to bring forward investment decisions that might otherwise be postponed—sometimes indefinitely.
We know from the experience of 1984 to 1986 that capital allowances work. They are not perfect—no fiscal stimulus ever is—but they can help. That is why the Confederation of British Industry, the Engineering Employers Federation, and the Trades Union Congress called for enhanced allowances, and why business men throughout the country endorse precisely the proposal contained in our amendment.
Tom O'Connor, chairman of the CBI's Small Firms Council, said last September:
An increase in the rate of depreciation allowance for plant and machinery from the current 25 per cent. would

provide a powerful and direct stimulus to small companies' investment. The economy would benefit: as growth increases so will revenues from business, in the form of corporation tax.
The only person who does not seem to agree with the need for enhanced allowances as a one-off stimulus for investment activity is the Chancellor of the Exchequer. He and his colleagues have consistently ruled out the case for capital allowances. They accuse us of dirigiste tendencies in advocating them, but that is total nonsense. Perhaps the Chancellor ought to consider the words of the President of the Board of Trade who in 1987, in an earlier incarnation, wrote an extremely interesting book, "Where There's a Will". It praises, in particular, the Japanese approach to the relationship between Government and industry. The right hon. Gentleman wrote that the Japanese
have done the very thing which we pretend no government can do: they have targeted the world marketplace and, with a combination of domestic competition and taxpayer support, they have come to capture an increasingly large share of it. Do we really think our companies can win without the backing of our government when the consumer appetite in Britain is so eagerly fed by imports from a country whose economic and industrial effort is so single-mindedly directed?
That puts the case in a nutshell.
This country needs Government support of manufacturing industry in particular—especially in the form of fiscal stimulus of the kind that our amendment proposes. That cannot completely ensure effective and sustained recovery, but it would be a key part of the required package.
The Government's record on manufacturing investment is appalling. In real terms, the level is now lower than when the Tories took office in 1979. Britain is the only country in the Community to have suffered in that way. Worse still, the value of investment in our manufacturing industry is still falling. In the past year, it fell by a staggering 11 per cent., and Government figures published last week show that the decline is continuing.
Investment in plant and machinery is the seed corn of future wealth creation. Unless we invest now, we shall not produce goods, provide jobs, make sales, and achieve growth in the years ahead. That is especially true of manufacturing industry—yet the Tories have neglected and denigrated its importance for far too long. With our balance of payments deficit already starting to rise again, nothing is more crucial than providing a boost to manufacturing investment. Our amendment would achieve precisely that, and I commend it to the Committee.

Mr. Ted Rowlands: In one of the numerous speeches that have been made in the House on the Maastricht treaty in recent months, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) reminded us that the German economic miracle was not created by the Bundesbank but was the consequence of innovative industrial investment by German companies—and that, for all the changes that might occur in economic and monetary union and among the central banks, the ultimate test of an economy is whether it invests in manufacturing the products that consumers want.
I have had the privilege of representing for more than 20 years a community that began the industrial revolution. It had iron and steel works in the 18th century, and holds to the traditional belief that manufacturing is a good thing. This country seems to have lost its appetite for making


things, and now believes that there are other ways of sustaining the economies of communities such as mine. That has proved to be an illusion.
The Financial Secretary spoke of his pupillage under Mr. Peter Walker. We all had our pupillage under him. When he was Secretary of State for Wales, he was our new economic whiz kid for the best part of two years. He used to travel around boasting that the Principality supported more jobs in banking than in mining. I never understood the point he was making. Perhaps he was suggesting that it was a good thing that there were fewer jobs in mining, or that at least there were alternative jobs in banking. We did not understand why they could not be complementary. Why should it be thought that miners were competing for jobs with bankers? Nevertheless, that is the basis on which, for the past two or three years, we were sold an alternative economy.
It was suggested that the service sector would be our exciting new saviour, but in the past year or two we have started to see insecurity in the very sector that was supposed to provide our salvation. The recent threat of a takeover by Lloyds of the Midland created a wave of insecurity, and taught us how wrong it is to attempt to rebuild the economy of a community such as mine on the service sector.
It would be all right if that sector had brought to our communities the sophisticated information technology that characterises today's new-style, high-class financial services, but it has not done so. Instead, we have seen only a spate of DIY retailers—large sheds selling DIY goods of one kind or another. They are heavily dependent on the community's purchasing power, so other jobs must exist to create it if those new retail activities are to survive. owever, cuts are occurring even in that sector in communities such as mine.
The only modern inward investment in my community has come from the Japanese, who were attracted by successive Governments. The first to establish itself in my constituency did so under a Labour Government in the 1970s. The most recent new project was announced 12 months ago.
Inward investors require two things. First, they are looking for a work force trained in manufacturing. The real victims of the recession and the collapse of manufacturing investment in my community, apart from companies, have been the manufacturing training programmes and manufacturing training opportunities.
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Great public corporations, such as the British Steel Corporation and Hoover, offered great training opportunities to young people in my constituency, but, in the past decade, they have closed down their manufacturing training schools. National vocational qualifications and training and enterprise councils have not replaced the training infrastructure, which was an intrinsic part of the manufacturing communities that I represent.
Sadly, in communities like mine, we are training to obtain yesteryear's skills on yesteryear's machines. That is the real tragedy. Inward investors ask, "Where are the modern skills and a trained work force? Where are the work force who understand the concept of total quality management and understand a modern production line rather than the old-fashioned ones?" Because of the lack of manufacturing investment, people in my area are being trained on machines, and therefore for skills, that are

already out of date. The problem is not only a lack of manufacturing investment, but the fact that that lack has led to the sacrifice of the training skills in our communities.
My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) has raised an important fundamental principle that is essential to the redevelopment of the economy in areas such as mine. As a result of inward investment, we desperately hope that the development of component making and the provision of services to new manufacturers will play a part in our manufacturing salvation. There have been some exciting success stories, such as Nissan in the north-east and Sony in Bridgend, where the resourcing of components has begun to create alternative manufacturing job opportunities in smaller companies.
I have been involved in prompting, cajoling, pleading with and begging the Welsh Development Agency and a succession of Secretaries of State to take the supply development initiative seriously. It would enable local companies to service, feed and deliver components to the occasional new company that we manage to attract to our areas. That is the way to increase the number of manufacturing jobs in our society. In the present climate, in which companies face cripplingly high interest rates, a lack of liquidity and the absence of proper manufacturing incentives, manufacturing supply development initiatives are simply dreams rather than practical propositions.
The desperate need to create a new manufacturing training programme and the opportunity to develop supply development initiatives are dependent on a new spirit, attitude and set of incentives designed to assist manufacturing in communities such as mine.

Mr. Tim Smith: I apologise to the hon. Member for Islington, South and Finsbury (Mr. Smith) because I was not present at the start of his speech. However, I listened carefully to the remainder of what he said.
Although the hon. Gentleman's amendments are well intentioned, they are misguided. They are well intentioned because everyone wants a strong manufacturing base and increased manufacturing investment in the United Kingdom. The question is whether it makes sense in tax terms to discriminate positively in favour of manufacturing and, by definition, against other forms of investment.
Labour Members have consistently had difficulty in coming to terms with the fact that, in an expanding economy, manufacturing, by definition, tends to constitute a smaller and smaller proportion of national output. In Britain, it constitutes about 25 per cent. of output, but in other economies it accounts for a much smaller proportion. That is a sign not of failure but of success. It is a sign of overall growth, because there is a finite limit to the demand for manufactured goods by consumers. Consumers with large disposable incomes have a greater propensity to spend on increased services, such as leisure, tourism, sport and other service products.
Labour Members also find it difficult to appreciate that manufacturing businesses have tended to concentrate more and more on their core activities. For example, they may have carried out one particular function that was important but ancillary to the core business, in-house, but today they tend to contract out that service.
The successful American company, Mars, which is based in Slough, ran a large transport business, which was an integral part of its manufacturing business. A few years


ago, it sold the transport business, through a management buy-out, to the people who ran it. Therefore, that is now a separate business and, for the purposes of the standard industrial classification, is now categorised as a service rather than as a manufacturing business. Nothing had actually changed, but Mars, like many other companies, had decided to concentrate on its core manufacturing activity and to contract out the important support services.
The hon. Member for Islington, South and Finsbury said that capital allowances work, and he cited the period from 1984 to 1986 to support his proposition. However, that proposition depends on what one means by capital allowances and what one means by work. The hon. Gentleman picked a strange period, because it came immediately after the Lawson reforms. The great advantage of, and the important element in, the Lawson reforms was that the standard rate of corporation tax was reduced from 52 to 35 per cent. Since then, the Treasury has further reduced the figure to 33 per cent., as we can see from clause 19.

Mr. Chris Smith: The reason I cited that period was that the Lawson reforms were announced in 1984, and they were introduced in 1986. In the intervening period, when the threat of the removal of capital allowances was hanging over British industry, manufacturing investment increased by 19.1 per cent. in 1984 and by 14.7 per cent. in 1985. It was clear that the existence of capital allowances, combined with the prospect of their removal, acted as a powerful incentive for investment to take place.

Mr. Tim Smith: The hon. Gentleman is almost right. The allowances were not announced in 1984 and introduced in 1986. There was a three-year transitional period, in which the rate of capital allowance was reduced by a percentage per annum. I think that the transitional period ran for three years, during which capital allowances were gradually phased out. I accept that, in that period, some investment was brought forward to take advantage of the higher rates of allowances.
When I worked in industry in the 1970s and a 100 per cent. capital allowance existed, there was no doubt that, at the end of the financial year, we carefully considered whether we could make any additional investment because the rate of allowance was so high. Such investment was made for the wrong reasons. It is quite wrong for any commercial decision to be taken for tax reasons.
If commercial decisions are taken for tax reasons and not on their commercial merits, taxation can distort decision making. That happened in the 1970s, when we had a high rate of corporation tax and high capital allowances. From my experience, I can tell the House that that is what happened. We should not focus on the quantity of investment only: we need to focus on its quality.

Mr. Clive Betts: rose—

Mr. Smith: I shall give way in a moment.
Over the past 30 to 40 years, there was no shortage of investment in eastern European countries. The result of that investment is derelict and serves no useful purpose at all. The investment was totally and utterly useless, because it was not part of a market economy and the products produced were quite unsaleable.

Mr. Betts: The hon. Gentleman seems to be saying that taxation distorts commercial decisions. Is the logic of that that there should not be any taxation in the commercial arena and that, far from changing allowances, there should be no allowances to encourage investment?

Mr. Smith: The object of taxation is to raise revenue for the Treasury. If we were in the fortunate position of some countries, such as some states in the middle east, we would not need taxation, which has no virtue of its own. There is a good intellectual case for not having corporation tax and for taxing only company profits that are in the hands of shareholders. That is rather wide of the debate, but it is an interesting argument against corporation tax.
Any corporation tax is a burden on companies. The main source of investment in the United Kingdom is not borrowed money or shareholders' money, but retained profits. That is not widely understood. That forms the largest source of investment, and the larger the proportion of profit removed by the Treasury the smaller the proportion that remains for investment. That is why any sensible taxation system should be based on the lowest possible rate. That applies to income tax as much as to corporation tax, and there should be as few allowances as possible. That will lead to the fewest possible economic distortions.
Politicians always want to interfere in industry to try to achieve this, that or the other worthwhile objective. That did not work in the 1970s, and it would not work now.

Mr. Beith: The debate is a re-run of one that we had a year or 13 months ago when virtually the same amendment was tabled. Since then, I have not become any more convinced by the argument. I accept the analysis by the hon. Member for Islington, South and Finsbury (Mr. Smith) of the worrying state of investment in manufacturing and I share some of his general observations. However, that is some way from being convinced that the proposed method of operating the tax system would bring about the sensible investment that is required. That is a large assumption. To start with, one has to distinguish between manufacturing and services, and that is a difficult and unreal distinction.
It is not necessarily detrimental to a country to have more investment in services than in manufacturing. The line is arbitrary, and activities which some people might consider wholly undesirable are to be found in manufacturing while activities which would pass the highest test of acceptability to every Labour Member are found on the service side of the line.
There is no established correlation between the size of a country's manufacturing sector and its general economic performance. Manufacturing is desirable, but it is not an index of overall economic success. It is therefore difficult to justify a pro-manufacturing or pro-services stance. That has not been shown to be a direct route to overall economic success.
In assessing the amendment, we must consider whether investment decisions taken on the basis of this year's tax relief would be significantly different, and, if so, whether they would be significantly better. It is arguable that they might not be significantly different and that one year's tax relief is not enough to tip the balance on many major investment decisions. Would it indeed be right for that to tip the balance, and what are we discounting against that tax relief? How marginal was the investment decision, and


what assumptions are made about future achievements for which one year's tax relief will pay? At best, it is a questionable proposition.
More effort must be directed to justifying the expenditure of large amounts, especially if the resources could be used to improve the system in other ways. I shall argue on a subsequent amendment that it might be better to give business the security of knowing that inflation would not erode the allowances that it enjoys under the tax system. That would enable it to predict with reasonable accuracy the relationship between the tax system, the company's financial position, and the value of its assets. No doubt the Minister will have estimated the cost of accepting the amendment.
In criticising the effectiveness of the proposal, and in saying that its effect, if any, might be to lead to bad investment decisions, I do not dissent from the expressed desire for greater investment—but the case is not proven that such measures will lead to good quality investment decisions in manufacturing.

Mr. Jim Dowd: I rise to speak for the first time in the Chamber. When I was preparing my speech I asked someone whose recollection of when he made his maiden speech is dim and distant about the sort of reception that I could expect. I was told that the Chamber has three types of people: those on the Front Benches who are present because they have to be; those who have just spoken and who will stay for a decent interval before leaving; and those who would be waiting for me to sit down so that they could speak. I shall therefore do what I can to keep my speech brief.
My first thanks go to the people of Lewisham, West and I pledge to work on their behalf. My constituency has had a habit—I use the past tense—of changing its representatives at fairly regular intervals. I am sure that it has outgrown that, however, and can look forward to some decades of uncharacteristic tranquillity. The constituency covers a fairly anonymous part of inner suburban London—Forest Hill, Catford and Sydenham. I am sure that not many Members are familiar with it because it is so far from a tube station and the paucity of black cabs means that journalists, in particular, regard it as an extreme adventure to go that far. In common with millions of people throughout the British Isles, however, the people of Forest Hill, Sydenham and Catford are decent, hard-working and industrious and judge their public representatives harshly. I shall be happy to rest on their future judgment.
The constituency has had a collection of representatives in the House. The father of the right hon. Member for City of London and Westminster, South (Mr. Brooke), who was in the Committee a short time ago, represented the constituency for a short time just after the war. John Maples was my immediate predecessor. Politically, he and I were about as opposed as it is possible to be on most things. In his maiden speech some nine years ago he called, rather inauspiciously, for the introduction of a poll tax. He even called it that at the time. He then spent some years learning to call it a community charge. In the world outside, one can always recognise Ministers or their predecessors because they are the only people who talk about the community charge—the rest of the world calls it the poll tax.
As I have said, I did not get on with Mr. Maples politically. He strongly supported the abolition of the Inner London education authority, a blow which inflicted grievous damage on the education prospects not just of children but of almost the entire population of inner London. He opposed the establishment of a London-wide authority, the absence of which has damaged the prospects of London people. Despite our political differences, however, I found Mr. Maples helpful and courteous and I wish him well in whatever lies before him. I am led to believe that he is well thought of in certain circles in the Conservative party, so perhaps we shall see him somewhere else. I suspect that the people of Lewisham have taken permanent leave of him.
The hon. Member for New Forest (Sir P. McNair-Wilson) represented Lewisham, West for a couple of years back in the 1960s, as did the now Minister of Agriculture, Fisheries and Food.

Mr. Paul Boateng: Did he?

Mr. Dowd: My hon. Friend should know that. I was reminded of the right hon. Gentleman's tenure of office in Lewisham only the other day when I heard a farmer being interviewed on the radio. The interview took place the day after the right hon. Gentleman returned from discussions in Brussels on the reform of the common agricultural policy. The farmer was making some fairly unenthusiastic comments about the Minister and at the same time there were strange noises in the background. In a broad west country accent, the farmer said, "No, that be not John Gummer—that be Crocus the pig." That was on "The World At One". The Minister is remembered in Lewisham, West.
Perhaps my most illustrious predecessor was Christopher Price. He made a considerable mark and is well remembered for his efforts. He is well remembered, especially in these times, for the work that he did in what became known as the Confait case. It was one of the earliest exposures of poor practices in the administration of justice and in the processes of the Metropolitan police. Christopher Price was tenacious for many years. I believe that many hon. Members who have followed in his footsteps to some extent examined the way in which he pursued justice in the Confait case. They have gone on to reveal many of the sad but damning miscarriages of justice that we have seen in recent times.
That is a broad outline of Lewisham, West and of those who have represented the constituency in the past.
I am grateful to be able to speak in the debate because my background is in engineering, which is the largest element of manufacturing industry. I disagree with those who have said that the plight of manufacturing industry is a tribute to our success. I am reminded of the comment that if we have many more successes like this, we shall all be ruined. The economy has always relied on a strong manufacturing base and it will continue to do so for the foreseeable future. That being so, we need to do what we can to nurture manufacturing industry.
I accept that an enlightened taxation regime alone will not enable manufacturing industry to thrive and flourish. That alone will not make the difference between success and failure. I am certain, however, that such a regime provides a framework around which much can be achieved. Without a sympathetic, understanding and supportive industry, Britain will dissolve and enter into a


stately decline over the years as other nations overtake us one by one, whether they be our European competitors or the emerging industrial powers of the far east. Such a decline would have grave economic and social consequences for the people of Britain.
The hon. Member for Beaconsfield (Mr. Smith) asked whether, if we provide tax incentives for manufacturing, we shall discriminate against other forms of investment. My short answer is that we would and we should. Manufacturing strength is the key to the wellbeing of our competitors in Europe and throughout the world. Their pre-eminence in industrial and economic terms is built on their manufacturing base. Until we are able to emulate them, we shall be in terrible trouble.
The manufacturing sector is losing an enormous number of jobs. At the same time, production is in decline. That is one of the consequences of the lost jobs, many of which were skilled. We are losing skills and Britain is in danger of providing the tin bashers of Europe. That will happen if all the high-value-added jobs go abroad. If that happens, we shall be lucky if we are able to attract, by tax policies as much as anything else, investment by overseas multinationals for the assembly of high-tech goods which are manufactured elsewhere. There is the danger that we shall become little more than an assembly operation.
My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) talked about training. In 1967, I became an apprentice telephone engineer with what was then the Post Office. That was before all this British Telecom nonsense and when the Post Office was something worth while. During 1967, when I was 16, about 25,000 apprentices were taken on by the Post Office; last year, British Telecom took on about 100. That is what happens when a manufacturing skills base is lost. Opportunities are lost for young people and communities become unbalanced.
I went on to work for Plessey, which was taken over by the consortium of GEC and Siemens. I am not entirely au fait with parliamentary privilege, so I shall not say precisely what I should like to put before the House. Those who have expressed their views of Arnold Weinstock outside the Chamber are currently before the courts, so I shall not be too provocative. There is a strong likelihood, however, that GEC-Plessey Telecoms, which is the only large-scale British telecommunications manufacturing company, will be entirely in German hands in the near future. Much of the high-value work that is carried out on modern telephone digital systems will he undertaken in Munich and Berlin and British plants will be reduced, if not closed.
I am talking about good telephone systems. Hon. Members on both sides of the House know that they are good because the one used in the Palace of Westminster was manufactured by Plessey and it functions extremely well. On the underside of the telephones that most of us have on our desks—large white ones with digital displays—there is the statement that they were made in the United Kingdom. That is actually a slight fiction. On the display side of the telephones are two red lights, the message waiting light and the call diverted light. Those are the only two items that were made in the United Kingdom. The telephones were shipped here as complete units, having been manufactured by Nitsuko in Japan. When they

arrived here, the two light-emitting diodes were added. That qualified the telephones to be classified as made in the United Kingdom, but all the real work was done elsewhere.
I shall bring my remarks to a close because I have spoken for slightly longer than I intended. A healthy service sector is important, as everyone realises, but only as an adjunct to a firm manufacturing base. The British people will not survive if they are restricted solely to taking in one another's washing or cleaning one another's windows. There must be a firmer base for our prosperity across the range of engineering and industrial activities, which sadly have been in decline.
It is possible to recover. Everyone in the Chamber will recall that a few decades ago the title, "Made in Japan" was regarded with derision. We bought Japanese goods only if we could not afford better, or if they were the only goods available to us. These days, that title means quality and value for money. It is a lesson that we would do well to learn. It is Britain's future in manufacturing that will serve the British people best in the long run.

Mr. Peter Mandelson: I warmly congratulate my hon. Friend the Member for Lewisham, West (Mr. Dowd) on his excellent maiden speech, which reflected well on himself and his future contributions in the House and his constituency. He described his constituency as an anonymous place, but there is little doubt in our minds this afternoon that, if he continues to make contributions such as he has made today, his constituency will quickly cease to be anonymous. I warmly congratulate him again.
Amendment No. 2 addresses the problem of the many firms which are postponing or abandoning much-needed investment decisions, prolonging the recession and further weakening Britain's long-term manufacturing strength. By enabling a company to offset more of its investment costs against its corporation tax liability, an increase in allowances would stimulate and bring forward much needed industrial investment in Britain.
The independent Institute of Fiscal Studies estimates that the change contained in the amendment would lead to an increase in investment of 6.5 per cent. That, in its estimation, represents an increase in manufacturing investment of about £3.3 billion. Because the proposal is time-limited to one year, essentially so, it provides a powerful incentive for investment decisions presently in the balance to be brought forward, and would thus aid much-needed recovery. That is why we are promoting this important amendment.
But let us be clear why we are doing so in the context of the wider argument that we need to have today about the importance of manufacturing in Britain, about the relationship between Government and industry in Britain and the conditions in which business can flourish. Let us be clear why manufacturing is so important.
Manufacturing has been, is and always will be the main tradeable part of our economy. It is literally Britain's means of paying its way in the world. The idea that we can simply replace our manufacturing base with the service sector is not only economically wrong but underestimates the extent to which a thriving service sector depends on a thriving manufacturing sector. As this month's balance of payments figures demonstrate all too clearly, the principal


constraint upon our economic recovery, even when it comes, will be the inadequate base of our industry and our inability to increase the tradeable part of the economy.
Of course, no one would claim that any lone action by Government, any single change in the tax regime or any specific increase in capital allowances would transform industry's prospects or performance. Instant solutions are not available, and the Labour party is not putting them forward. But that is not an argument for doing nothing, which seems to be a view held by many Conservative Members. Lying behind the amendment is the Labour party's contention that the Government simply must exercise much greater responsibility for supporting and encouraging the manufacturing sector.
Why, during the past 13 years, have the Government turned their back on manufacturing in the way they have? It was not just a consequence of misguided economic logic, but a product of political prejudice, with manufacturing repeatedly dismissed as an obsession of the Labour party.
By a uniquely destructive combination of policy measures, the Conservative party took a hatchet to manufacturing in Britain—hiking interest rates and the then value of the pound, massively increasing the price of electricity and gas supplied to industry, increasing VAT to 15 per cent. which affected service as well as manufacturing industry, and dismantling crucial instruments and areas of regional development policy. By all those means, that uniquely destructive combination of policies, the Conservative party wiped out 25 per cent. of Britain's manufacturing in its first five years in office.
The effects of those locust years were disastrously experienced in my constituency. With the closure or retraction of major steel, marine engineering, electronics and light manufacturing works over that period, no fewer than 10,000 jobs were lost in Hartlepool in that period.
In the current recession, the closures and the loss of jobs have continued. In the past two years new emerging high-tech firms have been left to flounder. The loss of high-precision engineering at Rolls-Royce in my constituency resulted in 450 redundancies. The closure of Isocom, making precision electronic parts, created a further 90 redundancies.
What a tragedy—not just that the huge, wanton destruction of productive capacity has taken place in new as well as traditional industries, but that, in the second recession, like the first created by the Government, the Conservative party failed to take the measures necessary to spur the reinvestment needed to build up manufacturing afresh.
There has never been any secret about the path to economic recovery of towns such as Hartlepool and the country as a whole. That path depends above all on innovation, on developing new products and new processes to replace those that have gone. It rests on converting scientific inventiveness and research into competitive production and tradeable goods. The Government recognise that need only in their rhetoric. They fail to take the action necessary to make it a reality.
In the past 10 years, the Conservative Government have cut and cut again public support for research and development in Britain. The result is that, for every £1 spent in Britain on discovering and developing new technologies, £1.50 is spent in Italy, £2 in France and £2.35 in Germany.
Government figures published only this week reveal that, despite the welcome increase in spending on research

and development by many British companies, we still as a nation spend less than half the amount per employee on research and development that is spent by companies in the United States and Germany.
On the eve of the completion of the single market, the Germans, with the active backing of their Government, will invest about £3,000 for each manufacturing worker, and the Italians and the Americans will invest about the same. The Dutch will invest more than £6,000. Yet no more than £1,800 will be invested in each British manufacturing worker.
There is just no comparison between what is being done in Britain for manufacturing and what is being promoted by the Governments of all our industrial rivals. Yet we compete in the same global marketplaces and are subject to the same intense competitive pressures as our rivals.
It is not as if there is a shortage of inventiveness in Britain. There is no absence of enterprise in towns across Britain such as the one that I represent, yet what is so often researched in Britain is developed abroad. What is invented here is manufactured elsewhere. All too often, that is because neither the Government and their agencies nor the banks and their local branches will do enough to nourish new products and new firms from their inception. The Government still refuse to face up to that fact and to act on it.
We have heard that again today in contributions from Conservative Members. Their complacent, apathetic response to Labour's proposal this afternoon confirms the extent of the Government's indifference. It shows the depth of their insincerity when they talk of the needs of industry.
It is worthy of note that, in its Budget submission to the Chancellor in January, the CBI called for increases in investment allowances to help industry. It wanted the Chancellor to raise allowances for plant and machinery from 25 per cent. to 40 per cent., which is what Labour proposes today. I am happy to act as a mouthpiece for the CBI when it acts as a champion of British industry. There is no doubt what companies now want. Business men in my constituency are asking not only for much-needed economic stability but for banks that stick with them and a Government who are willing to use the instruments of regional policy to target incentives for location, expansion and innovation.
The message is clear, but who is listening in the upper reaches of Government? Following the general election, industry must have been heartened and encouraged to read some of the early newspaper stories that were spun from 10 Downing street. "Major focusses on industry", said the Financial Times; "Major puts support for industry at centre of post-election strategy", said another newspaper. Industry waited for the new initiative heralded by those headlines, eagerly anticipating the first decisive action of the new appointee, the right hon. Member for Henley (Mr. Heseltine). When the first blow was struck, however, it was not for the promotion of manufacturing but for the self-promotion of the man.
The right hon. Member for Henley decided to rename his job—not to emphasise industry, but to drop it entirely from his title. The Secretary of State for Trade and Industry became simply the President of the Board of Trade. What signal was that supposed to send to Britain's manufacturing firms? The right hon. Gentleman cared so much for industry that he could not even be bothered to retain the word on his letter heading.


As the weeks have gone on, we have heard one presidential keynote speech after another—

The Chairman: Order. The hon. Gentleman is straying from his own party's amendment.

Mr. Mandelson: I am trying to put the amendment in context.

The Chairman: It is for the hon. Gentleman to judge how to do that, but he has not succeeded so far.

Mr. Mandelson: Let me try to return to the main argument.
According to the right hon. Member for Henley, the Government want to "take determined, positive action" to deal with the trade deficit and to promote the interests of manufacturing industry. That is the objective of our amendment. The right hon. Gentleman, however, boasts openly that increasing his Department's activity would mean increasing that Department's expenditure, and he says that he refuses to do that.
One is left with the unavoidable impression that what the right hon. Gentleman wants is not better relations with industry and the promotion and growth of the manufacturing sector but better press relations for the President of the Board of Trade. He is seeking not greater public support for industry and the manufacturing sector —which we seek in our amendment—but greater public attention for himself. If that impression is correct, the right hon. Gentleman's reputation will soon become the most rapidly squandered in government.
There are some in the north-east who have a keen interest in the growth of the manufacturing sector, and have voiced support for the amendment, and who retain some hope for the right hon. Member for Henley. One prominent business leader in the region, a former public servant, commented: "From what one hears, there are one or two things that he would be willing to do"—but quickly added, "only if his colleagues were like-minded, and from what I hear that is not so." Judging by what Conservative Members have said so far, most of those colleagues are assembled on the Front Bench today—including, I suspect, the Minister who is to reply to the debate.
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No one can take any satisfaction from the fact that the right hon. Member for Henley seems to be losing his battle against the intransigence and indifference of the Treasury in the course of his quest for the promotion of the manufacturing sector. Many managements and work forces have shared objectives, and feel an ardent desire to act in partnership within their local communities; they want to boost their businesses, and they want our amendment to be accepted. When they call for such measures, they are not engaging in special pleading, and they do not want to be featherbedded. All they want is a framework of support in which they can prove themselves.
That is why the Labour party will continue to champion the cause of manufacturing, and to call for the adoption of increased capital allowances for investment. We must do that: we have no choice, because so much is at stake for our constituencies and for manufacturing industry throughout the country.

Mr. John Townend: I did not intend to speak, but I should like to make three short points.
It is a bit rich for the Opposition to try to blame the Government for what has happened to manufacturing industry. We all appreciate the importance of manufacturing, especially those of us who represent northern constituencies, but we must ask where the greatest declines have taken place. One of the main components of our current balance of payments deficit is the car industry deficit. Who destroyed the British car industry? It was not destroyed by a lack of capital allowances, or by a Conservative Government. It was destroyed by the car industry itself—principally the unions, with strikes, go-slows, bad quality and restrictive practices. We all remember the time when inspectors could reject only a certain number of cars coming off the line on grounds of poor quality, because if they rejected more the workers would strike.
Who destroyed the shipbuilding industry? We all remember a time when the order books were full, but then the boilermakers said, "We want to drill the holes in the hulls and we shall strike unless we get work."

The Chairman: Order. What is sauce for the goose is sauce for the gander. Let us return to the subject of capital allowances.

Mr. Townend: I think that what I am saying is relevant. The decline in manufacturing industry is not due to a lack of capital allowances; it is due to the trade union activities of the 1970s as much as anything else.
Training and education in the engineering industry have been mentioned. When the Opposition talk of the dearth of engineers, they always mention training, but they never mention education. We must remember that more and more of our able young people are going to university. Many youngsters who would once have taken apprenticeships at Rolls-Royce now opt for university instead. Regrettably, however, too few read engineering: they read history, sociology or business studies.
Those are the future captains of industry. In Japan, far more graduates have engineering degrees. When they move on to general management and become captains of Japanese industry, they have an engineering background. I think that we should encourage far more people to read engineering at university. Not enough are encouraged to do so while they are at school, and many do not want to because qualifying as an engineer is very hard work—much harder than reading history, sociology or business studies. Anyone who denies that has not studied engineering.
I do not think that capital allowances would play a major part in encouraging investment. Investment is being deterred by the lack of demand and by high interest rates. Despite reductions of 5 per cent. or 6 per cent., our interest rates are still high in real terms. Industry is looking for lower interest rates. If we achieve higher demand and lower interest rates, investment will follow. Even if capital allowances of 100 per cent. were offered, without demand investment would not be made—[Interruption.] Labour Members do not like to hear the truth.
The Government might consider a change which would be helpful and just. Capital allowances are based on written-down values. It therefore takes a long time to write off machinery. I ask my hon. Friend the Financial


Secretary seriously to consider adopting the straight line method whereby machinery is written off within four or five years.
Labour Members should realise that the Government have created an environment for investment, a low tax regime, and good industrial relations. As a result, we have had more than 50 per cent. of Japanese and American inward investment into Europe, and we can see the resurgence of the British motor industry with the Nissan plant in Sunderland and the Toyota plant in Derbyshire. In 18 months or two years' time, with those Japanese companies based in this country, we shall win back our export markets and reduce the deficit in motor vehicles.

Dr. Roger Berry: It is with much pleasure that I rise to make my maiden speech. I have long wondered what the corridors of power were like. Little did I realise that, one day, I would have a desk in a corridor and, a few days later, a telephone. No doubt, given the ministerial statement last week, docklands is the next place on the agenda for Members.
Like my hon. Friend the Member for Lewisham, West (Mr. Dowd), I received advice from colleagues about making my maiden speech and was told about the traditions. I put to one side my normal response to the word "tradition"—recalling that tradition is the democracy of the dead—and listened to what they told me. They said, "You must be non-controversial, must ay nice things about your predecessor and your constituency and, above all, must be brief." They did not say, "You must never plan to make your maiden speech in the Committee stage of the Maastricht Bill before you know the outcome of the Danish referendum."
My predecessor, Rob Hayward, paid me the compliment of referring to me in the Chamber before the general election. I assume that he did so in response to the vigour of my activities as Labour leader on Avon county council. In so doing, he established a new tradition in the House. I am aware of the tradition that new Members say nice things about their predecessor. Mr. Hayward established the tradition that existing Members say nice things about those who are destined to replace them. Notwithstanding our substantial political differences, I should like to place on record my gratitude for the work that he did for many constituents in Kingswood. I wish him well in the future.
The constituency of Kingswood straddles the boundary between the city of Bristol and the borough of Kingswood. Half the constituency lies within the city of Bristol, parts of which were previously represented by Arthur Palmer and my right hon. Friend the Member for Chesterfield (Mr. Benn). The half of the constituency in the borough of Kingswood—if hon. Members are still with me—was previously represented by my good friend, Terry Walker, and the hon. Member for Wansdyke (Mr. Aspinwall). I should like to thank them for my inheritance.
That list shows that Kingswood has a rich and diverse political history. It also has a rich and diverse industrial history. It used to be an important area of coal mining —it is no longer so—and it used to be an important area for the boot and shoe manufacturing industry, but today only one firm is engaged in that work. Today, most of my constituents work in aerospace, defence-related industries, other manufacturing industries, financial services, local government and the health service. Many jobs have been lost in all those sectors.
Unemployment, or, according to the Government's statistics, the number of unemployed claimants—a rather different figure—has trebled in Kingswood in the past two years. I say to the hon. Member for Welwyn Hatfield (Mr. Evans), who yesterday described the unemployed as "layabouts" and received no rebuke from his colleagues, that that is due not to a sudden outbreak of laziness in my constituency but to the fact that many manufacturing companies have shed hundreds of jobs. The list—Rolls-Royce, British Aerospace, DRG Cartons, Bendix Engineering, Avon Tin Printers—is very long. Hundreds of people have been laid off.
My unemployed constituents are not layabouts. They spend day after day and week after week looking for work. They are unemployed because work is not available. On their behalf, I resent the comment about them yesterday. My remarks reflect the views not only of my unemployed constituents but of unemployed people throughout the country and, I hope, of the majority of people.
Unemployment and record interest rates have caused mortgage misery for thousands of families in my constituency, as elsewhere. There has been a record number of home repossessions because people have lost their jobs and because mortgage interest rates have been so high.
The problem of homelessness in Bristol and Kingswood is second only to that in London. That is a result of the economic position in which my constituents find themselves. They want the Government not simply to sit on their hands but to take appropriate action. That is why I strongly support amendment No. 2. Measures to stimulate investment in manufacturing are not everything, and can never be, but they are an important part of a programme that any sane Government would propose to restore manufacturing and to reduce unemployment.
Yes, of course other things can be done to reduce unemployment, such as releasing local council receipts to allow them to build the homes that people need and to repair crumbling schools. Yes, of course there should be an action programme for the long-term unemployed and greater investment in training.
I say in response to the hon. Member for Bridlington (Mr. Townend) that, yes, more investment should be made in education as well. Before becoming a Member, I worked in higher education. I can tell the hon. Gentleman that the problem of underfunding in higher education is serious. I can tell him that Avon county council is working hard to train and educate young people. It is not helped when the Government's spending target requires the county council to make cuts of 12 per cent. or 13 per cent. in education year after year. The hon. Member for Bridlington was right—investment in education is important—but I would digress too far if I said any more about that.
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The importance of manufacturing was outlined earlier. Reference was made to the Lawson report. Mr. Lawson, a former Chancellor of the Exchequer, made a big point of saying that he failed to understand why manufacturing was especially important. I offer two reasons. First, manufacturing is the engine of the economy. It is the sector of the economy which, above all, is engaged in innovation and developing new products. It is an engine for growth, which is why the economies that grow the most rapidly are those with a strong manufacturing sector.


Secondly, as has been said, our balance of trade is crucially dependent on our performance in manufacturing. Our economy is faced with a 0.5 per cent. predicted growth rate for this year—the worst growth rate for any of the European Community countries—and has an annual current account deficit heading for between £10 billion and £12 billion this year, following the most tentative signs of economic recovery imaginable. If such an economy is not in need of investment, I do not know what kind of economy is.
For those who can see, there is enough evidence to suggest that Britain's lack of competitiveness is a serious matter. Restoring that competitiveness is an essential part of any strategy to reduce unemployment in my constituency or anywhere else. For that reason, I urge hon. Members to support the amendment.

Mr. Alan Milburn: It is a pleasure to follow my hon. Friend the Member for Kingswood (Dr. Berry). His wit, passion and insight are a credit to the House and, like other hon. Members, I shall look forward to his contributions in the future.
I support the amendments tabled in the name of my right hon. Friend the Leader of the Opposition because, without them, the Finance Bill is a damp squib. I say that for two reasons. First, it is out of date even before it becomes the law of the land. The very economic predictions on which it is based have already been revised downwards as economic indicator after economic indicator and forecast after forecast have forced the Government to acknowledge that economic recovery is as far away as ever.
Secondly, the Bill tackles the wrong problems. The essential economic problem facing the country is not over-taxation but chronic under-investment and short-termism. The Bill will merely exacerbate rather than tackle that particularly British problem. Crucially, the Bill does nothing to encourage investment in the key manufacturing sector that forms two thirds of the country's visible trade, which is why the amendments proposed by the Labour party are so important. They will begin to close the yawning investment gap that has developed between Britain and our competitors.
According to the Organisation for Economic Co-operation and Development, in the decade after 1978 the United Kingdom's proportion of gross domestic product devoted to manufacturing investment fell from 3.3 per cent. to only 2.4 per cent., while that of France and Germany grew to 3.5 per cent. and 3.9 per cent. respectively. It is therefore little wonder that this country's balance of trade in manufactured goods went into the red for the first time since the industrial revolution and has stayed there ever since. Quite simply, our industries cannot compete because they lack investment in up-to-date plant and equipment. Between 1980 and 1989, the amount spent on manufacturing investment per employee in this country was only £1,980 a year. By contrast, in the United States and Germany it was £2,850 per employee, in France it was £3,300 and, finally and not surprisingly, in Japan it was £5,360.
The Government's attitude towards the crisis is one of utter complacency. It is as if the £1,300 million trade gap that opened last month did not matter, as if the manufacturing import bill had not risen by 8 per cent. in

the previous year or as if the Confederation of British Industry's prediction of a further loss of 200,000 manufacturing jobs in 1992 was absolutely irrelevant.
My region, with its reliance on manufacturing, will again inevitably be one of the losers because of the failure of perception on the part of Ministers. In this recession, my constituency of Darlington has already lost 1,300 manufacturing jobs. Between September 1978 and September 1991, manufacturing employment fell by about 36 per cent. in the north as a whole. It will come as no surprise that in the decade after 1979 investment fell by 43 percent. in my region —the largest collapse of any region in the United Kingdom. Almost £3,500 million more would have been invested in manufacturing in the north between 1980 and 1987 if investment had remained at its 1979 level.
Two recent surveys of local businesses corroborate the picture of declining investment. According to the Association of British Chambers of Commerce's quarterly survey of investment intentions, the north-east's largest companies revised their investment plans downward by 5 per cent. during the first quarter of this year. In its first quarter review of business conditions in the region, the Northern Development Company reported that the balance of companies increasing exports sank to its lowest level for the seven quarters in which it had been undertaking its survey. Nearly one third of northern manufacturing companies were reported as cutting their work force. Inevitably, in this climate, the vast majority of surveyed firms were delaying their investment decisions.
The north's skills and enterprise are being fatally compromised by a Government who have given up the ghost with regard to investment in the regions. Indeed, the Government are contributing directly to disinvestment in areas such as the north as they deliberately dismantle regional policy. Only this week I received figures from Ministers at the Department of Trade and Industry that show that, since 1978, Government spending on regional financial assistance had collapsed by 85 per cent. in real terms in the north. In that year, the Labour Government were spending £158.8 million on regional assistance in the north. Last year, by contrast, the Conservatives spent just £23.6 million at 1978–79 prices.
While the Government have let Britain's regions go to the wall, other Governments have helped their regions to adapt to new industries. A renewed commitment to regional investment is now needed to give our regions the chance to compete effectively and to benefit from the single European market; otherwise, we face the prospect of a two-tier Europe developing, with regions like the north of England doomed to decline on the periphery of our continent. Such regions are brimming with ideas, innovation and enterprise, but they need investment and the companies there need an incentive to invest.
The Labour party's amendments represent a step in the right direction, towards a reinvigorated manufacturing base and a sustainable economic recovery, giving an immediate boost to manufacturing investment. Any failure to act now will forestall long-term economic recovery and, ironically, prove to be the Government's undoing. The chickens are already coming home to roost, as a weakened industrial base proves incapable of meeting even the weakened consumer demand during this recession. Inevitably, imports will go on rising and, with them, prices will rise. We shall no doubt then repeat the


same mistakes that were made during the 1980s. The brakes will be slammed on once again and we shall be plunged back into recession.
There is another way—one that will stimulate investment to help British industry to compete and to export and, in particular, help regions like the north. The Confederation of British Industry reported in February this year, prior to the Budget, that it was seeking increased capital allowances along the lines that the Labour party is proposing today. CBI News in February said:
encouraging investment does not mean taking risks with inflation. Indeed, a more flexible, more efficient and more productive business sector is essential if the economy is to grow without inflationary pressures developing and a high level of investment is a key element in achieving this.
If the Government are not prepared to listen to the Opposition and take note of our amendments, I hope that at least they will listen to the voice of business.

Mr. John Hutton: May I add to the words of my hon. Friends my congratulations to hon. Members who have made their maiden speeches this afternoon, particularly my hon. Friends the Members for Kingswood (Dr. Berry) and for Lewisham, West (Mr. Dowd), who made highly articulate and impassioned speeches on behalf of their constituents. Although she is no longer in her place, may I also congratulate the hon. Member for Newbury (Mrs. Chaplin), who made a highly articulate and cogent maiden speech.
I wish to speak in support of the amendment in the name of my right hon. Friend the Leader of the Opposition and about its relevance to the engineering industries of the United Kingdom, particularly companies with a traditional association with the defence sector, which needs practical and tangible help from the Government if it is to succeed in moving successfully into new product markets.
Some of the great industrial and manufacturing centres of the United Kingdom are represented on the Opposition Benches tonight. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) spoke passionately about the last 12 years in his constituency and the effects of the Government's policies on manufacturing investment and employment in south Wales. All my hon. Friends could repeat such stories of the misery caused by the Government's policies on manufacturing investment. In the past two years alone, my constituency has lost 7,500 jobs, all in the manufacturing sector. I remind the House that Barrow and Furness has the highest proportion of people employed in the manufacturing industry of any constituency in the United Kingdom. We are suffering directly and visibly because of the Government's consistent failure to support engineering and manufacturing industries. The amendment proposes a new regime of fiscal encouragement to stimulate fresh investment in the engineering sector, which will benefit companies in my constituency.
The year 1991 was, without doubt, a bad year for manufacturing industry. The Engineering Employers Federation reported that engineering output continued to fall last year and no prospect of growth is predicted for the mechanical engineering sector either. The United Kingdom machine tool industry sees no sign of improvement this year. Manufacturing output has fallen from 11.8 per cent. of GDP in 1970 to about 8 per cent this year. OECD figures reveal that real growth in manufacturing output in the United Kingdom is the

smallest of all our principal economic competitors. Growth in the United Kingdom was only 0.8 per cent. compared to nearly 10 per cent. in Japan, more than 4 per cent. in the United States, nearly 3 per cent. in Italy and nearly 2 per cent. in West Germany.

Mr. Barry Porter: Is it unreasonable to ask the hon. Gentleman to consider, in view of the attack that he has made on the Government's economic policies in the past 12 years, that, had the defence policies of the Labour party as evinced in 1979, 1983 and 1987 been followed, Barrow would have been a desert?

Mr. Hutton: That is an utterly predictable and hopelessly outdated response. It must be apparent to the hon. Gentleman that my constituents wanted a Labour Government because they returned a Labour Member of Parliament to represent them in the House. [Interruption.] I shall return to the main theme of my comments and ignore the hon. Gentleman's sedentary and ignorant comments.
The last two recessions have reduced employment in engineering from 3.3 million in 1979 to only 1.9 million in 1991. The employment prospects of engineering companies continue to decline. The past 20 years have seen a consistent decline in engineering and the past 18 months of severe recession have only compounded those problems. That weakness in engineering can be clearly seen in the figures for manufacturing investment, which show that total manufacturing investment was lower in 1991 than in 1979, despite the windfall that came to the Treasury from North sea oil. Manufacturing investment has fallen as a percentage of GDP. The Government predict further falls in overall investment and I suspect that those falls may be larger than they envisage.
The challenge facing the Government, therefore, is to pursue a much more productive approach to encouraging investment and to accept that they should pursue any instrument or tool available to them to stimulate that vital investment in engineering. It is the Government's responsibility to the defence industries of Britain to support companies such as Vickers Shipbuilding and Engineering Ltd. in my constituency, which is anxious to move into new product areas. The amendment will support the efforts of many companies in my constituency.
For all those reasons, the amendment is important to the engineering industries of Britain. Increased capital allowances are an effective means of promoting new investment, as shown by many of the reports which my hon. Friends quoted this afternoon. We recognise that improving capital allowances in manufacturing industry, particularly engineering, will not produce a sudden splurge of new investment but it will produce an essential source of new investment for engineering companies and encourage them to invest. By time-limiting the new allowances to one year, as the amendment proposes, investment decisions will be brought forward. Our amendment would go some way towards putting right the signal neglect of manufacturing industry since 1979, and I endorse it.

Mr. Betts: First, I congratulate you, Mr. Lofthouse, on your appointment and my colleagues the hon. Members for Lewisham, West (Mr. Dowd) and for Kingswood (Dr. Berry) on their excellent maiden speeches on this crucial issue of investment in our manufacturing industries.


After Margaret Thatcher was elected Prime Minister, a funny thing happened to some of my constituents: they had problems getting to sleep. Before anyone jumps to the wrong conclusion and thinks that perhaps the spectre of the lady on our television sets had something to do with it, let me tell the House that the problem had to do with noise. For years—indeed, for generations—my constituents who live near the industrial heartland of Sheffield, the lower Don valley, had gone to bed at night and listened to the rhythmic thumping of the drop hammers and forges which were the basis of the great steel and engineering industries of our city. Suddenly, within three or four years, that rhythmic sound stopped. Many of my constituents found that after the decline of that industry they could no longer get to sleep because they had been so conditioned to the noise and its lulling effect that its absence led to insomnia. Within four years, the powerhouse, not merely of Sheffield industry but of the British steel and engineering industry, was cut out. Highly specialised and highly skilled though it was, it became largely redundant.
The decline began with short-time working. It continued with redundancies. It was followed by further redundancies, closures and the sale of machines, often to other countries that still saw a need for manufacturing investment. It was further followed by the removal of factories' roofs and then by the demolition of the factories; piles of rubble were left in their place. Then the Government acted: we had the introduction of derelict land grants. The Government's response to the collapse of industry in Sheffield was to offer grants to clear up the sites once the factories had been demolished and 40,000 jobs in one valley had been destroyed in fewer than 10 years. That is the record that my constituents have to look back on.
Certainly, a lack of investment by many of the firms played a part—that is why this amendment on manufacturing investment is so important—and subsidised imports from other countries played a part; yet, throughout that time, the one consistent factor in the Government's response was complete inaction—the same sort of inaction that characterises their approach to the Finance Bill and the amendment.
I am not one of those who argue that wealth can be created only by manufacturing industry. Nurses and home helps are an important part of wealth creation. However, historically, manufacturing industry has been a key element in the British balance of payments. Until 1983, we always had a surplus on our trade in manufacturing industry. It is significant that since 1983 we have had not a surplus in any one year. Nor am I seeking to argue that we can replace like with like. We cannot recreate the drop hammers and forges of the past. Yet the amendment is important because it is a signal that we do not regard British manufacturing industry as dead, although in many ways it is profoundly unhealthy and in need of the sort of assistance that our amendment would provide.
In the initial years of the 1980s while the Government failed to act, Labour local authorities often sat down with industrialists to work out in partnership some alternative way forward. Eventually, the Government introduced development corporations and had the idea of city challenge. Both ideas were imposed without consultation. They were flawed, but at least they signalled some

recognition by the Government that some action was necessary, in particular to stave off the threat of a further decline in our older industrial areas.
Tonight we ask the Government to listen to our argument that so far action has been too little, too late and that therefore they should support our proposals. It is not only manufacturing industry that needs that response. Look at the construction industry and the unemployment there. Construction firms are going to the wall. Think how much they would benefit from any resurgence in manufacturing investment because it would create work for them.
Our suggestion of capital allowances is a positive move forward. What alternative are the Government offering? So far as I can see, little—indeed, nothing. That should not surprise us. Their record is deplorable. We are the only country in the European Community to have a lower level of manufacturing investment now than we had in 1979. There has been an 11 per cent. fall in manufacturing investment in the past 12 months and a 27 per cent. fall during the recession. Those figures come from Government Departments, so the Government cannot deny them. Manufacturing output is only 2 per cent. higher than it was in 1979. How does that square with the claims for a great economic miracle? Since 1979, growth in manufacturing output has been less in Britain than in any other major industrialised country. Even the CBI predicts further falls this year.
For the crucial issue of our balance of payments, that basic lack of manufacturing capacity means that as soon as there is any spark of recovery imports will be sucked in because our industry will not be able to produce the goods. The basic problem of a lack of investment in manufacturing industry will put a cap on the effective limit of any recovery that the Government can achieve. It will cap their ability to deal with the fundamental issue of unemployment.
I will not argue today that agreement to the proposal for capital allowances will bring back those rhythmic sounds that might help some of my constituents to sleep, but at least it might do something to bring back investment to manufacturing industry and that might help some of my constituents to find jobs.

Mr. Ken Purchase: I rise to speak in support of the amendment and then to speak specifically about my area, the west midlands, and Wolverhampton in particular, which it would assist. I do not need to rehearse the arguments or review history again —it is plain to see. There has been a massive reduction in employment opportunities in the west midlands, where manufacturing has been hit particularly hard. My colleagues have reviewed many of the discussions and introduced the statistics that underlie and illustrate what we have been seeing in the United Kingdom, especially in the west midlands, in recent years.
If we adopt the amendment, we will send a signal to industry that the Government support a revival and reinvestment strategy for engineering and manufacturing production. In the meantime, it is not the perception of industry that the Government care what is happening to it. Therefore, the adoption of the amendment would send a good signal.


6.30 pm
In Wolverhampton and the black country, industry and housing have long lived cheek by jowl and, in recent years, steps have been taken to ease the tensions that frequently arise between two. The Environmental Protection Act 1990 places a duty on local authorities and companies to reduce and clean up emissions from their plants in urban areas and so prevent the pollution that has been such a problem for so many years.
We all support the view that emissions should be purified and pollution dealt with, but there are problems. Wolverhampton has many foundries, and I understand from the local authority that more than 140 of the processes used in them will require authorisation under the 1990 Act. Existing companies have been given time to introduce the changes, and that is helpful, but new companies have to meet the requirements from day one.
The Minister talked at some length about the need to encourage new starts and boasted of the Government's record in that regard, and we need not refer to the number of companies that have failed in the same period. It is important, however, that we recognise the difficulties that both new and existing companies—particularly in the foundry industry in my area—will experience as a result of the 1990 Act.
I remind hon. Members that it costs £900 simply to apply for authorisation. To some small companies, that is a great deal of money. One company in my area consists of just a couple of blokes with a process for brass-plating door furniture and other household goods. The cost of applying, and the cost of improving the quality of factory emissions, will place a great burden on such companies. The amendment would be of some help in the important process of improving the quality of industrial emissions in my area.
The metal melting industry also has considerable problems and would benefit from the amendment. It is expected that, for quite a small company, the capital outlay involved in complying with the new regulations will be up to £10,000. At a practical level, assistance with the work would be helpful. The Department of Trade and Industry is not over-helpful at present. No company seeking merely to meet the requirements of the 1990 Act qualifies for help, and the amendment would be of considerable assistance in solving that problem, especially as the cost to larger companies with a number of stacks is expected to be as high as £500,000.
Wolverhampton and the west midlands desperately need investment. They also need to comply with the new requirements. I ask the Minister to recognise the help that the amendment would give to many small companies—companies for which he professes concern in overcoming their difficulties in improving their processes, and in meeting the demands that are rightly to be made of them. Given what is happening elsewhere in the world—I am thinking of Brazil in particular—it is especially important that we recognise the need to meet such environmental standards. I repeat that the amendment would help many small companies in Wolverhampton and the west midlands to do that.

Mr. Dorrell: I could spend a long time on the point made by the hon. Member for Wolverhampton, North-East (Mr. Purchase), as I am familiar with the problems of foundries. One in my own constituency faced exactly the environmental problems that the hon.

Gentleman described. His argument was not quite the same as that of most Opposition Members who spoke in support of the amendment moved by the hon. Member for Islington, South and Finsbury (Mr. Smith).
We have heard two maiden speeches. The first was from the hon. Member for Lewisham, West (Mr. Dowd), and I am grateful to him for the good wishes that he offered to John Maples. Conservative Members have good reason to be grateful to John because, during the general election, he was one of the most effective exponents of our case. He exposed the weakness of the shadow Cabinet's argument and helped to ensure that in the end, faced with the choice between the economic policy and Budget proposed by the right hon. and learned Member for Monklands, East (Mr. Smith) and the policies espoused by the Government, the electorate chose the latter. [HON. MEMBERS: "Except his constituents."] That is the great loss of the people of Lewisham, West and, as their new Member of Parliament was gracious enough to say, the House is confident in the expectation that John will soon be back here with us.
The hon. Member for Kingswood (Dr. Berry) also made his maiden speech, and I was grateful to him for what he said about Rob Hayward. The Boundary Commission is to continue its work during this Parliament and I am sure that Conservative Members, at least, will miss the expert advice that Rob gave us on the activities of the commission and their implications.
The hon. Member for Kingswood stressed the importance that he attached to manufacturing industry as the solution to the unemployment problem in his constituency, and it is that issue to which I shall now refer. I do not disagree with the proposition that manufacturing industry has a part to play in job creation and economic expansion, but it is only a partial role. The Opposition have argued that a special case should be made for manufacturing. I agree with the hon. Member for Berwick-upon-Tweed (Mr. Beith) that their arguments are simply not convincing.
The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asked us to go back to, and to back, manufacturing. The Government have been accused of attaching inadequate importance to manufacturing and of being biased against it. I simply do not accept that any of those propositions is true. I do not need persuading of the importance of manufacturing or of the contribution that it can and does make to a buoyant economy. I came from a manufacturing background myself, and my family business is still involved in manufacturing. If I took seriously the strictures of the hon. Member for Bradford, South (Mr. Cryer), I might even have declared an interest in manufacturing at the beginning of my speech. I do, however, need persuading that the contribution that the manufacturing sector makes to the economy is better, more vital or more special than—or different from—the contribution that any other sector of the economy makes to economic output.
I will explain why I take that view. First, as my hon. Friend the Member for Beaconsfield (Mr. Smith) and the hon. Member for Berwick-upon-Tweed said, the definition of manufacturing as an economic activity is very arbitrary —so arbitrary, in fact, that two Opposition Members spent a significant part of their time espousing the causes of companies which were not even in the manufacturing sector. The hon. Member for Merthyr Tydfil and Rhymney asked why Peter Walker deemed it desirable to shift people from mining into banking. Neither of those


activities is manufacturing. The hon. Member for Lewisham, West spoke about his former employment in British Telecom. The vast bulk of BT's activities are not manufacturing.

Mr. Dowd: I said that I started with the GPO 25 years ago. That was where I was trained. I subsequently spent 25 years with Plessey which is now GEC-Plessey Telecoms. I did not work for British Telecom.

Mr. Dorrell: The hon. Gentleman was also at pains to say that he worked in British Telecom in the days when there was none of the "privatisation nonsense". As one of my colleagues remarked, in those days people had to wait four months for a telephone.
I am trying to remind the House that the definition of manufacturing is relatively arbitrary. As my hon. Friend the Member for Beaconsfield explained, when Mars moved its distribution activity from in-house and subcontracted it to a third party, that moved activity—entirely arbitrarily—out of manufacturing into the distribution and, therefore, the service sector.

Mr. Rowlands: The Minister is labouring the point. However, the Government support selective financial assistance with great enthusiasm. In communities such as mine, the SFA is defined in terms of manufacture investment. The Minister should not stress the point too much or he will undermine one of the central points and policies which has been supported by successive Secretaries of State for Wales.

Mr. Dorrell: The hon. Gentleman will find it difficult to establish a split on that subject. It is important that all economic activity is desirable. Manufacturing, although desirable, is no more or less desirable than other forms of economic activity.
The suggestion that the Government are uncommitted to manufacturing because it has been declining as a share of our total economic activity over many years, including under Labour Governments, does not stand up. As my hon. Friend the Member for Beaconsfield rightly said, the share of manufacturing in total economic activity is declining in all developed economies, partly because of the point about definition that I have made, and partly because when consumers have marginal income available to them they spend it disproportionately on other activities rather than on the purchase of goods. That leads to an expansion of other activities within a free economy.
I do not find attractive the particular method of promoting manufacturing espoused by the hon. Member for Islington, South and Finsbury. The House should concentrate for a second on the fact that the amendment would not even channel capital allowances to the totality of manufacturing industry. The flow would be to those parts of manufacturing activity designated by order. The amendment seems to imply that Labour believes that it is desirable that capital allowances should be available to sectors defined by order by politicians. That seems to me to be the least desirable kind of capital allowance.

Mr. Robert Sheldon: I was disappointed to hear the Minister refer to manufacturing industry as though it were equivalent to any other part of our economy. Nigel Lawson made that point early in his period as Chancellor of the Exchequer, but then seemed to

withdraw from it. I am disappointed to see the idea resurrected. Clearly the most important aspect of manufacturing industry is that it is responsible for most of our exports. Japan and Germany are more successful than the United States and Britain because of the development of their manufacturing industries. We have not heard such comments from a Minister since they were made by Nigel Lawson some years ago.

Mr. Dorrell: The export record of British manufacturing industry is substantially more successful than most observers often recognise. Our share of world trade in manufactures is estimated to have risen in 1991 for the third year running. I am not trying to belittle the importance of manufacturing. At the beginning of my remarks, I stressed that I come from a manufacturing background and I represent a constituency where a substantial proportion of people are employed in manufacturing. However, I do not support the assertion, which is the necessary consequence of arguing that manufacturing is more important, that those employed in distribution, banking, services or mining and primary production are less important than those involved in manufacturing. I do not believe that that is true.
Whether or not we accept that manufacturing is separate, special and should be particularly assisted, there is the wider question whether capital allowances are a desirable way of promoting investment in manufacturing industry specifically or in the generality of industry.
6.45 pm
My right hon. Friend the Chancellor of the Exchequer made it clear in his Budget speech that the Government had reconsidered that point again very recently. All the considerations of issues in the run-up to the Budget are supposed to take place in total secrecy. However, in the interests of open government my right hon. Friend the Chancellor drew the veil aside slightly on Budget secrecy in his speech when he said:
I have considered this proposition very carefully. I would be as concerned as anyone if I thought that the corporation tax system introduced in 1984 was acting as a drag on profitable investment … The evidence suggests that the cost of higher capital allowances to the Exchequer would be several times greater than the resulting increase in investment over the next few years. I have therefore concluded that, whatever its superficial attractions, an increase in capital allowances would not be a sensible use of the resources available."—[Official Report, 10 March 1992; Vol. 205, c. 750.]
My right hon. Friend the Chancellor considered the point carefully and recently, and concluded that it was not
a sensible use of resources".
It is legitimate to ask why he reached that conclusion.

Mr. Chris Smith: The Financial Secretary to the Treasury must realise that studies undertaken by the Institute of Fiscal Studies and Keele university, both of which I tend to believe rather more than I believe the Chancellor of the Exchequer, find to the contrary. The cost of introducing capital allowances would be far outmatched by the benefit in terms of investment which would then take place.

Mr. Dorrell: That point may be espoused by Keele university, but it is not espoused by the Government. Before I was interrupted, I was about to explain why we reached the conclusion that we did. I suspect that my right hon. Friend the Chancellor reached the conclusion that he did because he looked at the evidence. He found that if we


consider the record of business investment over the past 15 years and compare the investment records of British business under the regime espoused by the Labour party and put in place by Labour during the five years of the 1974 Parliament with the five years of the 1987 Parliament, it is clear that the average rate of investment over the five years of the 1987 Parliament was 52 per cent. higher in real terms than under the regime espoused by the Labour party. I am not trying to dissemble between different types of investment. Manufacturing investment was 15 per cent. higher in the 1987 Parliament than it was in the 1974 Parliament. The facts do not support the assertion that capital allowances increase the flow of investment in the way argued by the Labour party.
If we compare the profitability of British industry now with earlier years, not only has investment continued to flow quickly into the business sector under this Government: the profitability of British business is also significantly higher. That is important for two reasons. First, it signifies that the investment is better and higher quality investment, delivering a better economic return. Secondly, it is important for the reason made clear by my hon. Friend the Member for Beaconsfield—that the largest single source of capital to finance investment is retained profits. If we want investment to expand, one of the best ways to deliver that is to improve the rate of profitability so that business has more money available to use for that desirable investment.

Mr. Sheldon: I apologise for intervening again, but I read with some care the passage from the Chancellor's speech that the Minister has quoted. The Chancellor had obviously considered the matter and, as a result, I am sure that the House took note of it. However, he was referring to capital allowances generally, not to manufacturing capital allowances or plant and machinery. Those are the areas about which we should be concerned. If the Minister considered that more limited area, he would find the arithmetic rather different.

Mr. Dorrell: I made it clear that I had moved on from the speciality of manufacturing to the general matter of capital allowances. For the reasons that I stated earlier, I do not accept the proposition that we should seek to bias the tax system in favour of manufacturing. I was then considering the wider matter of whether capital allowances were a sensible proposition in themselves, and I concluded that they were not.
The amendment relates to the wrong issue. It would aim to generate an investment-led recovery, but history has shown time and again that investment-led recoveries are chimeras. Investment decisions by business should not be led by political considerations as to how to get a tax relief. Investment decisions should be the result of the assessment by business men themselves of the sales prospects and productivity gains which will deliver profits to business and economic strength to the community.
The statistics show clearly that the regime that we have espoused has delivered not only more investment, but higher profitability of investment, and therefore the creation of a virtual circle which will deliver an expanding economy capable of financing further investment for the future and, most important of all, the expanding job opportunities that hon. Members rightly want as the result of a successful economy. I do not believe that the Opposition have made their case.

Mr. Boateng: This is the first of our Committee debates on the Finance Bill. I suspect that it will be one of our shortest debates, because Opposition Members intend to fight the Bill with all the vigour that we possess, and to fight it when necessary late into the night. We possess great vigour.
The debate takes place against a background of the most abject failure of manufacturing industry under the stewardship of the Conservatives. For example, 562,000 jobs have been lost in the manufacturing sector during this recession alone. According to the CBI, employment in manufacturing is forecast to fall by 143,000 between the first and fourth quarters of this year and by 214,000 by the end of 1993. No other country in the European Community has seen such a dramatic fall in manufacturing employment since 1979.
The speech of the hon. Member for Beaconsfield (Mr. Smith) was redolent with memory for hon. Members who have heard his speeches on previous Finance Bills.

Mr. Tim Smith: It was the same speech.

Mr. Boateng: Yes, it was the same speech, almost—we had a copy of the hon. Gentleman's contribution last year. We were told by him, "Never mind the quantity of investment, think only of the quality." I am bound to say that the contributions by Conservative Members—all three of them—were lacking in both respects.
In respect of the quality and quantity of Opposition Members' speeches, we could not have hoped for better. One by one my hon. Friends the Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Lewisham, West (Mr. Dowd), for Hartlepool (Mr. Mandelson), for Kingswood (Dr. Berry), for Darlington (Mr. Milburn), for Sheffield, Attercliffe (Mr. Betts) and for Wolverhampton, North-East (Mr. Purchase) spoke, and one by one they impressed by their knowledge and command of the subject. I would not do justice to their contributions if I did not pay particular regard to the maiden speeches by my hon. Friends the Members for Wolverhampton, North-East and for Kingswood.

Mr. Patrick Cormack: What about my hon. Friend the Member for Newbury (Mrs. Chaplin)?

Mr. Boateng: The hon. Member for Newbury is not present, but she made a useful contribution. We agree with her on one point at least—the sooner Greenham common is returned to its true purpose, the better it will be. [Interruption.] Yes, the enjoyment of the common land by the ordinary people of that neighbourhood. We hope to celebrate that early return.
It is useful to consider the amendment and Conservative Members' responses to it. We have brought forward a modest amendment—it is not outrageous and it should not offend those who are concerned about the health of our manufacturing industry—in a constructive spirit. We found support for the amendment from the CBI, engineering employers and the Trades Union Congress. They recognise the extent of the manufacturing crisis. They recognise, although it appears that the Government do not, the depth of the recession.
Only yesterday, Government spin doctors were at work in no less a journal than the Evening Standard. [Interruption.] All right, it is hardly a journal of record, I grant hon. Members, but at least it is the authentic voice


of the modern Conservative party. What does the authentic voice of the modern Conservative party have to say about the recession. It says:
The Chancellor is still convinced the recovery will become firmly established this year.
We have heard that before. Then it trots out some of the usual suspects for the cause of the recession and for the non-appearance of the recovery. We have heard many of them before, so I need mention them only in passing. They include a lack of consumer confidence. We were told, of course, that consumer confidence would suddenly revive the minute the Tories won the election. No such thing happened, of course. However, that point was trotted out. Interestingly, we are told that
Weaker energy output caused by maintenance work in the North Sea
is apparently a cause of the failure of the recovery to come on tap. The third reason, which is the most unusual of them all, is the "unseasonally good weather."
Apparently, according to the Evening Standard and the spin doctors at the Treasury, some of whom may be writhing as I speak, the "unseasonally good weather" has a hand in the poor performance in the first quarter. We need to explore how the "unseasonally good weather" acounts for that poor performance and, more important and more interesting, what the Government will do about it.
We have a hint from the Government's performance this afternoon. We have heard the rain-dancers of the Conservative party at work. I use the term "rain-dancers" advisedly. We have seen a variety of ritual movements and ritual incantations of the same old nostrums that those of us who have had to listen to them have heard year in and year out—the same old nostrums of Conservative market philosophy that have proved to be absolutely redundant and incapable of promoting the recovery that we seek. We have brought forward the amendment in the hope that the rain-dancers will recognise that, if they continue those incantations, vapid and vacuous movements and statements, they cannot hope to be the flower in the desert that they themselves have created.
The case for capital allowances is unanswerable, and the Government have not answered it. It is built on a desire to begin to counteract the devastation that has occurred in the manufacturing sector. We take no comfort from any notion that, somehow, the development of the financial services industry is not to be welcomed—we welcome it. If we are creating a strong economy, we need a balance between financial services and manufacturing. But, as was pointed out in the debate, not least by my hon. Friends the Members for Kingswood and for Lewisham, West, if one neglects manufacturing and believes simply that financial services alone can form the basis of a sound economy, one lives in cloud cuckoo land.
Since the news was put out that the plug was to be pulled on Olympia and York at Canary Wharf, GEC has announced a cut of more than 800 jobs in Chelmsford in Essex on top of the 5,000 jobs lost in the company last year. The Commercial Vehicle company has announced that it is to go into receivership. Harking back again to the points made by my hon. Friend the Member for Kingswood, British Aerospace has lost up to 640 jobs. Belling has gone into receivership, with the loss of 850 jobs in Enfield and a further 200 jobs in Burnley in Lancashire.
7 pm
In this afternoon's debate we have heard speeches from those who have been engaged in promoting business in north Tyneside. They are not engaged in an academic exercise but are encouraging the development of business there. We heard from those involved in promoting co-operative industry in the midlands. Again, that is not abstract or esoteric; it is the practical experience of those men and women who are involved in building a strong manufacturing economy.
We stand four square alongside those men and women and with the tide of history that says that manufacturing is important, that there is something important about the rhythm of creating, manufacturing and producing goods. We make no apology for that. The bell tolls for those on the Conservative Benches who constantly seek to undermine the strength of our manufacturing industry. Our amendment will carry the day. It holds the best hope for the future of our economy and I commend it to the Committee.

Question put, That the amendment be made:—

The Committee divided: Ayes 231, Noes 329.

Division No. 28]
[7.2 pm


AYES


Adams, Mrs Irene
Cryer, Bob


Ainger, Nicholas
Cummings, John


Ainsworth, Robert (Cov'try NE)
Cunliffe, Lawrence


Allen, Graham
Cunningham, Jim (Covy SE)


Anderson, Donald (Swansea E)
Cunningham, Dr John (C'p'l'nd)


Anderson, Ms Janet (Ros'dale)
Dafis, Cynog


Armstrong, Hilary
Dalyell, Tam


Ashton, Joe
Darling, Alistair


Austin-Walker, John
Davies, Bryan (Oldham C'tral)


Banks, Tony (Newham NW)
Davies, Ron (Caerphilly)


Barnes, Harry
Davis, Terry (B'ham, H'dge H'l)


Battle, John
Denham, John


Bayley, Hugh
Dixon, Don


Beckett, Margaret
Dobson, Frank


Bell, Stuart
Donohoe, Brian


Benn, Rt Hon Tony
Dowd, Jim


Bennett, Andrew F.
Dunnachie, Jimmy


Benton, Joe
Dunwoody, Mrs Gwyneth


Bermingham, Gerald
Eagle, Ms Angela


Berry, Roger
Enright, Derek


Betts, Clive
Etherington, William


Blair, Tony
Evans, John (St Helens N)


Boateng, Paul
Ewing, Mrs Margaret


Boyce, Jimmy
Fatchett, Derek


Boyes, Roland
Faulds, Andrew


Bradley, Keith
Field, Frank (Birkenhead)


Brown, Gordon (Dunfermline E)
Fisher, Mark


Brown, N. (N'c'tle upon Tyne E)
Flynn, Paul


Burden, Richard
Foster, Derek (B'p Auckland)


Byers, Stephen
Foulkes, George


Caborn, Richard
Fraser, John


Callaghan, Jim
Fyfe, Maria


Campbell, Ms Anne (C'bridge)
Galbraith, Sam


Campbell, Ronald (Blyth V)
Galloway, George


Campbell-Savours, D. N.
Gapes, Michael


Cann, James
George, Bruce


Chisholm, Malcolm
Gerrard, Neil


Clapham, Michael
Gilbert, Rt Hon Dr John


Clark, Dr David (South Shields)
Godman, Dr Norman A.


Clarke, Eric (Midlothian)
Godsiff, Roger


Clarke, Tom (Monklands W)
Golding, Mrs Llin


Clelland, David
Gordon, Mildred


Coffey, Ms Ann
Graham, Thomas


Cohen, Harry
Grant, Bernie (Tottenham)


Connarty, Michael
Griffiths, Nigel (Edinburgh S)


Cook, Frank (Stockton N)
Griffiths, Win (Bridgend)


Cook, Robin (Livingston)
Gunnell, John


Corston, Ms Jean
Hain, Peter


Cousins, Jim
Hall, Mike


Cox, Tom
Hanson, David






Harman, Ms Harriet
Oakes, Rt Hon Gordon


Henderson, Doug
O'Brien, Michael (N W'kshire)


Heppell, John
O'Brien, William (Normanton)


Hill, Keith (Streatham)
O'Hara, Edward


Hinchliffe, David
Olner, William


Hoey, Kate
O'Neill, Martin


Hogg, Norman (Cumbernauld)
Patchett, Terry


Home Robertson, John
Pendry, Tom


Hood, Jimmy
Pickthall, Colin


Howarth, George (Knowsley N)
Pike, Peter L.


Hoyle, Doug
Pope, Greg


Hughes, Kevin (Doncaster N)
Powell, Ray (Ogmore)


Hughes, Robert (Aberdeen N)
Prentice, Ms Bridget (Lew'm E)


Hughes, Roy (Newport E)
Prentice, Gordon (Pendle)


Hutton, John
Primarolo, Dawn


Illsley, Eric
Purchase, Ken


Ingram, Adam
Quin, Ms Joyce


Jackson, Ms Glenda (H'stead)
Radice, Giles


Jackson, Ms Helen (Shef'ld, H)
Raynsford, Nick


Janner, Greville
Redmond, Martin


Jones, Barry (Alyn and D'side)
Reid, Dr John


Jones, Ieuan (Ynys Môn)
Richardson, Jo


Jones, Jon Owen (Cardiff C)
Robinson, Geoffrey (Co'try NW)


Jones, Ms Lynne (B'ham S O)
Roche, Ms Barbara


Jones, Martyn (Clwyd, SW)
Rogers, Allan


Jowell, Ms Tessa
Rooker, Jeff


Kaufman, Rt Hon Gerald
Rooney, Terry


Keen, Alan
Ross, Ernie (Dundee W)


Kennedy, Ms Jane (L'p'l Br'g'n)
Rowlands, Ted


Khabra, Piara
Ruddock, Joan


Kilfoyle, Peter
Salmond, Alex


Lestor, Joan (Eccles)
Sheerman, Barry


Lewis, Terry
Sheldon, Rt Hon Robert


Litherland, Robert
Shore, Rt Hon Peter


Livingstone, Ken
Short, Clare


Lloyd, Tony (Stretford)
Skinner, Dennis


Loyden, Eddie
Smith, Andrew (Oxford E)


McCartney, Ian
Smith, C. (Isl'ton S & F'sbury)


McFall, John
Smith, Rt Hon John (M'kl'ds E)


McKelvey, William
Snape, Peter


Mackinlay, Andrew
Spearing, Nigel


McLeish, Henry
Squire, Rachel (Dunfermline W)


McMaster, Gordon
Steinberg, Gerry


McNamara, Kevin
Strang, Gavin


Madden, Max
Straw, Jack


Mahon, Alice
Taylor, Mrs Ann (Dewsbury)


Mallon, Seamus
Thompson, Jack (Wansbeck)


Mandelson, Peter
Tipping, Paddy


Marek, Dr John
Turner, Dennis


Marshall, David (Shettleston)
Vaz, Keith


Marshall, Jim (Leicester, S)
Walker, Rt Hon Sir Harold


Martlew, Eric
Walley, Joan


Maxton, John
Wardell, Gareth (Gower)


Meacher, Michael
Watson, Mike


Meale, Alan
Wicks, Malcolm


Michael, Alun
Williams, Rt Hon Alan (Sw'n W)


Michie, Bill (Sheffield Heeley)
Williams, Alan W (Carmarthen)


Milburn, Alan
Wilson, Brian


Miller, Andrew
Winnick, David


Mitchell, Austin (Gt Grimsby)
Wise, Audrey


Moonie, Dr Lewis
Worthington, Tony


Morley, Elliot
Wray, Jimmy


Morris, Rt Hon A. (Wy'nshawe)
Wright, Tony


Morris, Estelle (B'ham Yardley)



Morris, Rt Hon J. (Aberavon)
Tellers for the Ayes:


Mudie, George
Mr. Robert N. Wareing and


Mullin, Chris
Mr. Ken Eastham.


Murphy, Paul



NOES


Adley, Robert
Arnold, Sir Thomas (Hazel Grv)


Ainsworth, Peter (East Surrey)
Ashby, David


Aitken, Jonathan
Ashdown, Rt Hon Paddy


Alexander, Richard
Aspinwall, Jack


Alison, Rt Hon Michael (Selby)
Atkinson, Peter (Hexham)


Allason, Rupert (Torbay)
Baker, Rt Hon K. (Mole Valley)


Amess, David
Baker, Nicholas (Dorset North)


Ancram, Michael
Baldry, Tony


Arbuthnot, James
Banks, Matthew (Southport)


Arnold, Jacques (Gravesham)
Banks, Robert (Harrogate)





Bates, Michael
Forman, Nigel


Batiste, Spencer
Forsyth, Michael (Stirling)


Beggs, Roy
Forth, Eric


Beith, A. J.
Foster, Donald (Bath)


Bellingham, Henry
Fox, Dr Liam (Woodspring)


Bendall, Vivian
Freeman, Roger


Beresford, Sir Paul
French, Douglas


Biffen, Rt Hon John
Fry, Peter


Blackburn, Dr John G.
Gale, Roger


Body, Sir Richard
Gallie, Phil


Bonsor, Sir Nicholas
Gardiner, Sir George


Booth, Hartley
Garnier, Edward


Boswell, Tim
Gill, Christopher


Bottomley, Peter (Eltham)
Goodlad, Rt Hon Alastair


Bottomley, Rt Hon Virginia
Goodson-Wickes, Dr Charles


Bowden, Andrew
Gorman, Mrs Teresa


Bowis, John
Gorst, John


Boyson, Rt Hon Sir Rhodes
Grant, Sir Anthony (Cambs SW)


Brandreth, Gyles
Greenway, Harry (Ealing N)


Brazier, Julian
Greenway, John (Ryedale)


Bright, Graham
Griffiths, Peter (Portsmouth, N)


Brooke, Rt Hon Peter
Grylls, Sir Michael


Brown, M. (Brigg & Cl'thorpes)
Gummer, Rt Hon John Selwyn


Browning, Mrs. Angela
Hague, William


Bruce, Ian (S Dorset)
Hamilton, Rt Hon Archie


Bruce, Malcolm (Gordon)
Hamilton, Neil (Tatton)


Burns, Simon
Hampson, Dr Keith


Burt, Alistair
Hanley, Jeremy


Butcher, John
Hannam, Sir John


Butler, Peter
Hargreaves, Andrew


Butterfill, John
Harris, David


Campbell, Menzies (Fife NE)
Harvey, Nick


Carrington, Matthew
Haselhurst, Alan


Carttiss, Michael
Hawkins, Nicholas


Cash, William
Hawksley, Warren


Channon, Rt Hon Paul
Heald, Oliver


Chaplin, Mrs Judith
Heathcoat-Amory, David


Churchill, Mr
Hendry, Charles


Clappison, James
Heseltine, Rt Hon Michael


Clark, Dr Michael (Rochford)
Hicks, Robert


Clifton-Brown, Geoffrey
Hill, James (Southampton Test)


Coe, Sebastian
Hogg, Rt Hon Douglas (G'tham)


Colvin, Michael
Horam, John


Congdon, David
Hordern, Sir Peter


Conway, Derek
Howarth, Alan (Strat'rd-on-A)


Coombs, Anthony (Wyre For'st)
Howell, Ralph (North Norfolk)


Coombs, Simon (Swindon)
Hughes Robert G. (Harrow W)


Cope, Rt Hon Sir John
Hughes, Simon (Southwark)


Cormack, Patrick
Hunt, Rt Hon David (Wirral W)


Couchman, James
Hunt, Sir John (Ravensbourne)


Cran, James
Hunter, Andrew


Currie, Mrs Edwina (S D'by'ire)
Jackson, Robert (Wantage)


Curry, David (Skipton & Ripon)
Jenkin, Bernard


Davies, Quentin (Stamford)
Jessel, Toby


Davis, David (Boothferry)
Johnson Smith, Sir Geoffrey


Day, Stephen
Johnston, Sir Russell


Devlin, Tim
Jones, Gwilym (Cardiff N)


Dickens, Geoffrey
Jones, Nigel (Cheltenham)


Dicks, Terry
Jones, Robert B. (W H'f'rdshire)


Dorrell, Stephen
Jopling, Rt Hon Michael


Douglas-Hamilton, Lord James
Kellett-Bowman, Dame Elaine


Dover, Den
Key, Robert


Duncan, Alan
Kilfedder, James


Duncan-Smith, Iain
King, Rt Hon Tom


Dunn, Bob
Kirkhope, Timothy


Durant, Sir Anthony
Kirkwood, Archy


Eggar, Tim
Knapman, Roger


Elletson, Harold
Knight, Mrs Angela (Erewash)


Emery, Sir Peter
Knight, Greg (Derby N)


Evans, David (Welwyn Hatfield)
Knight, Dame Jill (Bir'm E'st'n)


Evans, Jonathan (Brecon)
Knox, David


Evans, Nigel (Ribble Valley)
Kynoch, George (Kincardine)


Evans, Roger (Monmouth)
Lait, Mrs Jacqui


Evennett, David
Lamont, Rt Hon Norman


Faber, David
Lang, Rt Hon Ian


Fabricant, Michael
Lawrence, Ivan


Fairbairn, Sir Nicholas
Legg, Barry


Fenner, Dame Peggy
Leigh, Edward


Field, Barry (Isle of Wight)
Lennox-Boyd, Hon Mark


Fishburn, John Dudley
Lester, Jim (Broxtowe)






Lidington, David
Sainsbury, Rt Hon Tim


Lilley, Rt Hon Peter
Scott, Rt Hon Nicholas


Lloyd, Peter (Fareham)
Shaw, David (Dover)


Lord, Michael
Shephard, Rt Hon Gillian


Luff, Peter
Shepherd, Colin (Hereford)


Lynne, Ms Liz
Shepherd, Richard (Aldridge)


MacGregor, Rt Hon John
Sims, Roger


MacKay, Andrew
Skeet, Sir Trevor


Maclean, David
Smith, Sir Dudley (Warwick)


McLoughlin, Patrick
Smith, Tim (Beaconsfield)


McNair-Wilson, Sir Patrick
Soames, Nicholas


Madel, David
Speed, Keith


Maginnis, Ken
Spencer, Sir Derek


Maitland, Lady Olga
Spicer, Sir James (W Dorset)


Malone, Gerald
Spicer, Michael (S Worcs)


Mans, Keith
Spink, Dr Robert


Marland, Paul
Spring, Richard


Marlow, Tony
Sproat, Iain


Marshall, John (Hendon S)
Squire, Robin (Hornchurch)


Marshall, Sir Michael (Arundel)
Stanley, Rt Hon Sir John


Martin, David (Portsmouth S)
Steel, Rt Hon Sir David


Mates, Michael
Stephen, Michael


Mawhinney, Dr Brian
Stern, Michael


Mayhew, Rt Hon Sir Patrick
Stewart, Allan


Mellor, Rt Hon David
Streeter, Gary


Merchant, Piers
Sumberg, David


Michie, Mrs Ray (Argyll Bute)
Sykes, John


Milligan, Stephen
Tapsell, Sir Peter


Mills, Iain
Taylor, Ian (Esher)


Mitchell, Andrew (Gedling)
Taylor, Rt Hon D. (Strangford)


Mitchell, Sir David (Hants NW)
Taylor, John M. (Solihull)


Moate, Roger
Taylor, Matthew (Truro)


Molyneaux, Rt Hon James
Taylor, Sir Teddy (Southend, E)


Monro, Sir Hector
Thomason, Roy


Montgomery, Sir Fergus
Thompson, Sir Donald (C'er V)


Moss, Malcolm
Thompson, Patrick (Norwich N)


Needham, Richard
Thornton, Malcolm


Nelson, Anthony
Thurnham, Peter


Neubert, Sir Michael
Townend, John (Bridlington)


Newton, Rt Hon Tony
Townsend, Cyril D. (Bexl'yh'th)


Nicholls, Patrick
Tracey, Richard


Nicholson, David (Taunton)
Tredinnick, David


Nicholson, Emma (Devon West)
Trend, Michael


Norris, Steve
Trimble, David


Onslow, Rt Hon Cranley
Trotter, Neville


Oppenheim, Phillip
Twinn, Dr Ian


Ottaway, Richard
Tyler, Paul


Page, Richard
Vaughan, Sir Gerard


Paice, James
Viggers, Peter


Paisley, Rev Ian
Waldegrave, Rt Hon William


Patnick, Irvine
Walden, George


Patten, Rt Hon John
Walker, A. Cecil (Belfast N)


Pattie, Rt Hon Sir Geoffrey
Walker, Bill (N Tayside)


Pawsey, James
Wallace, James


Peacock, Mrs Elizabeth
Waller, Gary


Pickles, Eric
Ward, John


Porter, Barry (Wirral S)
Wardle, Charles (Bexhill)


Porter, David (Waveney)
Waterson, Nigel


Portillo, Rt Hon Michael
Watts, John


Powell, William (Corby)
Wells, Bowen


Rathbone, Tim
Wheeler, Sir John


Redwood, John
Whittingdale, John


Renton, Rt Hon Tim
Widdecombe, Ann


Richards, Rod
Wiggin, Jerry


Riddick, Graham
Wilkinson, John


Rifkind, Rt Hon. Malcolm
Willetts, David


Robathan, Andrew
Winterton, Mrs Ann (Congleton)


Roberts, Rt Hon Sir Wyn
Winterton, Nicholas (Macc'f'ld)


Robertson, Raymond (Ab'd'n S)
Wolfson, Mark


Robinson, Mark (Somerton)
Wood, Timothy


Roe, Mrs Marion (Broxbourne)
Yeo, Tim


Ross, William (E Londonderry)
Young, Sir George (Acton)


Rowe, Andrew (Mid Kent)



Rumbold, Rt Hon Dame Angela
Tellers for the Noes:


Ryder, Rt Hon Richard
Mr. Sydney Chapman and


Sackville, Tom
Mr. David Lightbown.

Question accordingly negatived.

Mr. Beith: I beg to move amendment No. 1, in page 12, line 47, at end add
`and shall have effect as if there had been added to section 25(1)(b) of the Capital Allowances Act 1990 after "thereto" the words
The balance so arrived at shall be up-rated by the rate of inflation for the chargeable period, as given by the gross domestic product deflator, in respect of any chargeable period beginning on or after 1st April 1992".'.
I shall be brief, because I do not share the ambition of the hon. Member for Brent, South (Mr. Boateng) to fight the Bill line by line, tooth and nail. It does not justify that, and the hon. Gentleman will have some difficulty identifying more than half-a-dozen clauses to which anyone could take strong exception. It is just not that kind of Bill. Other legislation might justify that sort of treatment, but not this.
The amendment suggests a sensible way of changing corporation tax arrangements to protect companies from inflation adding to their corporation tax burden. Providing a long-term, stable corporation tax framework is more likely to provide the climate for investment than one-off incentives designed to promote manufacturing investment in a particular year. I hope that the Government share our objective, even if they feel unable to agree to the amendment.
The present tax system—certainly corporation tax—is distorted by inflation. When the Government's inflation policy goes wrong, business is hit not only by higher prices and higher interest rates but by a higher real corporation tax burden. That distortion can itself lead to lower investment.
The most pernicious aspect relates to investment allowances. Companies can only write down a machine's historic cost, not its current cost, which creates a disincentive to invest. Removing that distortion would be a simple and sound long-term reform of greater value than one-year investment of the kind that the Committee has rightly just voted against, by a substantial majority.
With the Chancellor of the Exchequer in his place, the Financial Secretary might feel obliged to argue that there will not be any inflation, because the Government will remove that scourge from the economy. Even the Chancellor has taken to talking about not the zero inflation rate which the Prime Minister repeatedly mentioned, but a target of 2 per cent. Some have even criticised him for setting so ambitious a target, with the downside that it has in terms of some of the more uncomfortable disciplines associated with it. I share his desire to set a firm target, and would be inclined to go for the zero target rather than for 2 per cent.
Industry has been down this road before when it was told that it could make reforms because there would be no inflation. Nigel Lawson thought and said that in 1984, but inflation took off after reforms led to the removal of the stock allowances. Business was penalised twice as a consequence of inflation.
It would be more sensible to introduce this reform when inflation is low because that would reduce its cost. Its introduction now would also show that the Government are determined to keep inflation low. If inflation rose, the cost of that reform would increase. It therefore makes a great deal of sense to make the change now.
The corporation tax system is vulnerable to distortion in other ways because there is no stock relief, and because nominal rather than real interest rates are deductible. We


simply propose one change in the way in which inflation is accounted for in that system. It is a modest change, which would provide more stability for business and encourage more investment decisions to be made on the right grounds rather than because they would incur one-year tax relief. Those decisions would be made because they represented good economic, business sense. I commend the amendment to the Committee.

Mr. Dorrell: The hon. Member for Berwick-upon-Tweed (Mr. Beith) described the amendment as a modest measure and that is a fair description. I shall make a brief reply, and I am afraid that I shall not suggest to the House that we accept the amendment.
The amendment would adjust capital allowances to allow for inflation, presumably on the ground that the current write-down allowance for tax understates the true cost of using the asset. That is not true because, as I quoted earlier, my right hon. Friend the Chancellor said in the Budget statement:
on average, the current tax rules allow capital investment to be written off more quickly than economic depreciation would imply".—[Official Report, 10 March 1992; Vol. 205, c. 750.]
The 25 per cent. write-off allowance already allows for inflation, plus a bit more. The hon. Gentleman's assumption is wrong.
There is another reason why this would not be a desirable amendment. I refer to the hon. Gentleman's confidence, or lack of it, that inflation will be brought under control. I am not sensitive about it and I simply remind him that our monetary policy is now set in the context for which the Liberal party argued for many years on the ground that it would be a more successful counter-inflation policy. The pound is in the exchange rate mechanism and we share the hon. Gentleman's confidence that his policy will deliver low inflation. The amendment will, therefore, he unnecessary.

Mr. Beith: I am unconvinced and I believe that i f the Government anticipate a successful anti-inflation policy, they should recognise the reasonable cost of the amendment. Business is dissatisfied with the extent of the write-down allowances and it does not feel that the present system adequately allows for inflation. I therefore invite the Committee to make a sensible change to the corporation tax system.

Question put, That the amendment be made:—

The Committee divided: Ayes 125, Noes 291.

Division No. 29]
[7.23 pm


AYES


Ainger, Nicholas
Callaghan, Jim


Ainsworth, Robert (Cov'try NE)
Campbell, Ms Anne (C'bridge)


Allen, Graham
Campbell, Menzies (Fife NE)


Anderson, Donald (Swansea E)
Campbell-Savours, D. N.


Ashton, Joe
Chisholm, Malcolm


Banks, Tony (Newham NW)
Cohen, Harry


Barnes, Harry
Corbyn, Jeremy


Battle, John
Cousins, Jim


Beckett, Margaret
Cox, Tom


Beggs, Roy
Cryer, Bob


Benn, Rt Hon Tony
Cummings, John


Bennett, Andrew F
Cunliffe, Lawrence


Benton, Joe
Cunningham, Jim (Covy SE)


Betts, Clive
Dafis, Cynog


Boyce, Jimmy
Darling, Alistair


Boyes, Roland
Davies, Bryan (Oldham C'tral)


Bradley, Keith
Davis, Terry (B'ham, H'dge H'l)


Brown, N. (N'c'tle upon Tyne E)
Dixon, Don


Bruce, Malcolm (Gordon)
Dunwoody, Mrs Gwyneth





Enright, Derek
Mandelson, Peter


Ewing, Mrs Margaret
Marek, Dr John


Fatchett, Derek
Marshall, David (Shettleston)


Flynn, Paul
Marshall, Jim (Leicester, S)


Foster, Donald (Bath)
Martlew, Eric


Gilbert, Rt Hon Dr John
Meale, Alan


Godman, Dr Norman A.
Michie, Mrs Ray (Argyll Bute)


Godsiff, Roger
Milburn, Alan


Golding, Mrs Llin
Miller, Andrew


Graham, Thomas
Molyneaux, Rt Hon James


Griffiths, Nigel (Edinburgh S)
Morley, Elliot


Griffiths, Win (Bridgend)
Morris, Rt Hon A. (Wy'nshawe)


Gunnell, John
Morris, Estelle (B'ham Yardley)


Hall, Mike
Mudie, George


Harvey, Nick
O'Brien, William (Normanton)


Hendron, Dr Joe
Paisley, Rev Ian


Heppell, John
Pickthall, Colin


Hinchliffe, David
Prentice, Ms Bridget (Lew'm E)


Hogg, Norman (Cumbernauld)
Radice, Giles


Howarth, George (Knowsley N)
Robinson, Geoffrey (Co'try NW)


Hoyle, Doug
Roche, Ms Barbara


Hughes, Roy (Newport E)
Rooker, Jeff


Hughes, Simon (Southwark)
Ross, William (E Londonderry)


Hutton, John
Salmond, Alex


Illsley, Eric
Simpson, Alan


Jackson, Ms Helen (Shef'ld, H)
Skinner, Dennis


Janner, Greville
Spearing, Nigel


Johnston, Sir Russell
Steel, Rt Hon Sir David


Jones, Barry (Alyn and D'side)
Steinberg, Gerry


Jones, Ieuan (Ynys Môn)
Strang, Gavin


Jones, Ms Lynne (B'ham S O)
Taylor, Rt Hon D. (Strangford)


Jones, Martyn (Clwyd, SW)
Taylor, Matthew (Truro)


Jones, Nigel (Cheltenham)
Trimble, David


Kennedy, Charles (Ross, C & S)
Walker, A. Cecil (Belfast N)


Kennedy, Ms Jane (L'p'l Br'g'n)
Wallace, James


Khabra, Piara
Wardell, Gareth (Gower)


Kirkwood, Archy
Wareing, Robert N


Loyden, Eddie
Wicks, Malcolm


Lynne, Ms Liz
Winnick, David


McKelvey, William
Wise, Audrey


McLeish, Henry
Wright, Tony


McMaster, Gordon



Madden, Max
Tellers for the Ayes:


Maginnis, Ken
Mr. A. J. Beith and


Mahon, Alice
Mr. Paul Tyler.


Mallon, Seamus





NOES


Adley, Robert
Boyson, Rt Hon Sir Rhodes


Ainsworth, Peter (East Surrey)
Brandreth, Gyles


Aitken, Jonathan
Brazier, Julian


Alexander, Richard
Bright, Graham


Alison, Rt Hon Michael (Selby)
Brooke, Rt Hon Peter


Allason, Rupert (Torbay)
Brown, M. (Brigg & Cl'thorpes)


Amess, David
Browning, Mrs. Angela


Ancram, Michael
Bruce, Ian (S Dorset)


Arbuthnot, James
Burns, Simon


Arnold, Jacques (Gravesham)
Burt, Alistair


Arnold, Sir Thomas (Hazel Grv)
Butcher, John


Ashby, David
Butler, Peter


Aspinwall, Jack
Butterfill, John


Atkinson, Peter (Hexham)
Carrington, Matthew


Baker, Rt Hon K. (Mole Valley)
Carttiss, Michael


Baker, Nicholas (Dorset North)
Cash, William


Baldry, Tony
Channon, Rt Hon Paul


Banks, Matthew (Southport)
Chaplin, Mrs Judith


Banks, Robert (Harrogate)
Clappison, James


Bates, Michael
Clark, Dr Michael (Rochford)


Batiste, Spencer
Clifton-Brown, Geoffrey


Bellingham, Henry
Coe, Sebastian


Bendall, Vivian
Colvin, Michael


Beresford, Sir Paul
Congdon, David


Biffen, Rt Hon John
Conway, Derek


Blackburn, Dr John G.
Coombs, Anthony (Wyre For'st)


Body, Sir Richard
Coombs, Simon (Swindon)


Bonsor, Sir Nicholas
Cope, Rt Hon Sir John


Booth, Hartley
Cormack, Patrick


Boswell, Tim
Couchman, James


Bowden, Andrew
Cran, James


Bowis, John
Currie, Mrs Edwina (S D'by'ire)






Curry, David (Skipton & Ripon)
Heathcoat-Amory, David


Davies, Quentin (Stamford)
Hendry, Charles


Davis, David (Boothferry)
Heseltine, Rt Hon Michael


Day, Stephen
Hicks, Robert


Deva, Nirj Joseph
Hill, James (Southampton Test)


Devlin, Tim
Hogg, Rt Hon Douglas (G'tham)


Dickens, Geoffrey
Horam, John


Dicks, Terry
Hordern, Sir Peter


Dorrell, Stephen
Howarth, Alan (Strat'rd-on-A)


Dover, Den
Howell, Ralph (North Norfolk)


Duncan, Alan
Hughes Robert G. (Harrow W)


Duncan-Smith, Iain
Hunt, Rt Hon David (Wirral W)


Dunn, Bob
Hunt, Sir John (Ravensbourne)


Durant, Sir Anthony
Hunter, Andrew


Eggar, Tim
Jackson, Robert (Wantage)


Elletson, Harold
Jenkin, Bernard


Emery, Sir Peter
Jessel, Toby


Evans, David (Welwyn Hatfield)
Johnson Smith, Sir Geoffrey


Evans, Jonathan (Brecon)
Jones, Gwilym (Cardiff N)


Evans, Nigel (Ribble Valley)
Jopling, Rt Hon Michael


Evans, Roger (Monmouth)
Kellett-Bowman, Dame Elaine


Evennett, David
Key, Robert


Faber, David
Kilfedder, James


Fabricant, Michael
King, Rt Hon Tom


Fairbairn, Sir Nicholas
Kirkhope, Timothy


Fenner, Dame Peggy
Knapman, Roger


Field, Barry (Isle of Wight)
Knight, Mrs Angela (Erewash)


Forsyth, Michael (Stirling)
Knight, Greg (Derby N)


Forth, Eric
Knight, Dame Jill (Bir'm E'st'n)


Fox, Dr Liam (Woodspring)
Knox, David


Fox, Sir Marcus (Shipley)
Kynoch, George (Kincardine)


Freeman, Roger
Lait, Mrs Jacqui


French, Douglas
Lamont, Rt Hon Norman


Fry, Peter
Lang, Rt Hon Ian


Gale, Roger
Lawrence, Ivan


Gallie, Phil
Legg, Barry


Gardiner, Sir George
Leigh, Edward


Garnier, Edward
Lennox-Boyd, Hon Mark


Gill, Christopher
Lester, Jim (Broxtowe)


Gillan, Ms Cheryl
Lidington, David


Goodlad, Rt Hon Alastair
Lightbown, David


Goodson-Wickes, Dr Charles
Lilley, Rt Hon Peter


Gorman, Mrs Teresa
Lloyd, Peter (Fareham)


Gorst, John
Lord, Michael


Grant, Sir Anthony (Cambs SW)
Luff, Peter


Greenway, Harry (Ealing N)
MacGregor, Rt Hon John


Greenway, John (Ryedale)
MacKay, Andrew


Griffiths, Peter (Portsmouth, N)
Maclean, David


Grylls, Sir Michael
McLoughlin, Patrick


Gummer, Rt Hon John Selwyn
McNair-Wilson, Sir Patrick


Hague, William
Madel, David


Hamilton, Rt Hon Archie
Maitland, Lady Olga


Hamilton, Neil (Tatton)
Malone, Gerald


Hanley, Jeremy
Mans, Keith


Hannam, Sir John
Marland, Paul


Hargreaves, Andrew
Marlow, Tony


Harris, David
Marshall, John (Hendon S)


Haselhurst, Alan
Marshall, Sir Michael (Arundel)


Hawkins, Nicholas
Martin, David (Portsmouth S)


Hawksley, Warren
Mates, Michael


Heald, Oliver
Mawhinney, Dr Brian





Mayhew, Rt Hon Sir Patrick
Spencer, Sir Derek


Merchant, Piers
Spicer, Sir James (W Dorset)


Milligan, Stephen
Spicer, Michael (S Worcs)


Mills, Iain
Spink, Dr Robert


Mitchell, Andrew (Gedling)
Spring, Richard


Mitchell, Sir David (Hants NW)
Sproat, Iain


Moate, Roger
Squire, Robin (Hornchurch)


Monro, Sir Hector
Stanley, Rt Hon Sir John


Montgomery, Sir Fergus
Stephen, Michael


Moss, Malcolm
Stern, Michael


Nelson, Anthony
Stewart, Allan


Neubert, Sir Michael
Streeter, Gary


Newton, Rt Hon Tony
Sumberg, David


Nicholls, Patrick
Sweeney, Walter


Nicholson, David (Taunton)
Sykes, John


Nicholson, Emma (Devon West)
Tapsell, Sir Peter


Norris, Steve
Taylor, Ian (Esher)


Onslow, Rt Hon Cranley
Taylor, John M. (Solihull)


Oppenheim, Phillip
Taylor, Sir Teddy (Southend, E)


Ottaway, Richard
Temple-Morris, Peter


Page, Richard
Thomason, Roy


Paice, James
Thompson, Sir Donald (C'er V)


Patnick, Irvine
Thompson, Patrick (Norwich N)


Pawsey, James
Thornton, Malcolm


Peacock, Mrs Elizabeth
Thurnham, Peter


Pickles, Eric
Townend, John (Bridlington)


Porter, Barry (Wirral S)
Townsend, Cyril D. (Bexl'yh'th)


Porter, David (Waveney)
Tredinnick, David


Portillo, Rt Hon Michael
Trend, Michael


Powell, William (Corby)
Trotter, Neville


Rathbone, Tim
Twinn, Dr Ian


Redwood, John
Vaughan, Sir Gerard


Richards, Rod
Viggers, Peter


Riddick, Graham
Waldegrave, Rt Hon William


Rifkind, Rt Hon. Malcolm
Walden, George


Robathan, Andrew
Walker, Bill (N Tayside)


Roberts, Rt Hon Sir Wyn
Waller, Gary


Robertson, Raymond (Ab'd'n S)
Ward, John


Robinson, Mark (Somerton)
Waterson, Nigel


Roe, Mrs Marion (Broxbourne)
Watts, John


Rowe, Andrew (Mid Kent)
Wells, Bowen


Ryder, Rt Hon Richard
Wheeler, Sir John


Sackville, Tom
Whittingdale, John


Sainsbury, Rt Hon Tim
Widdecombe, Ann


Scott, Rt Hon Nicholas
Willetts, David


Shaw, David (Dover)
Winterton, Mrs Ann (Congleton)


Shephard, Rt Hon Gillian
Winterton, Nicholas (Macc'f'ld)


Shepherd, Colin (Hereford)
Wolfson, Mark


Shepherd, Richard (Aldridge)
Yeo, Tim


Sims, Roger
Young, Sir George (Acton)


Skeet, Sir Trevor



Smith, Sir Dudley (Warwick)
Tellers for the Noes:


Smith, Tim (Beaconsfield)
Mr. Tim Wood and


Soames, Nicholas
Mr. Sydney Chapman.


Speed, Keith

Question accordingly negatived.

Clause 19 ordered to stand part of the Bill.

Bill (Clauses 19 and 20), reported without amendment; to lie upon the Table.

Orders of the Day — Northern Ireland (Prevention of Terrorism)

The Secretary of State for Northern Ireland (Sir Patrick Mayhew): I beg to move,
That the draft Northern Ireland (Emergency and Prevention of Terrorism Provisions) (Continuance) Order 1992, which was laid before this House on 19th May, be approved.
The order will renew the emergency powers and provisions currently operating in Northern Ireland. The debate also gives us the opportunity to review the operation of a number of new provisions contained in the Northern Ireland (Emergency Provisions) Act 1991, the benefits of which are already beginning to be seen. First, I shall speak briefly about the need for the provisions.
We have available yet again the invaluable help of Lord Colville's review. As always, Lord Colville has thought deeply about the nature of the emergency powers and has consulted widely about their operation. He has suggested this year a number of significant and specific improvements, some of which I will mention later. I very much welcome, however, his central conclusion that:
The new Act, and new arrangements in it, seem to have been introduced and have since been operated without any appreciable adverse reaction.
He does not recommend the suspension of any of its provisions.
It is entirely right that Parliament should take this annual opportunity to see whether the emergency powers and provisions continue to be needed. Determined as we are to bring about the elimination of terrorism, the Government aim by co-ordinated policies to eliminate the need for these measures. For the present, however, it is my duty to report to the House that, regrettably, they remain essential and that we intend that they continue to be used, certainly with sensitivity, but with unremitting resolution.
During the past 12 months the campaign of violence by terrorists from both sides of the community has continued with all its malignity and futility. Since July, 101 people have died and many more have been injured. Homes and livelihoods have been destroyed by bombs and incendiaries recklessly strewn in the midst of human beings or in the premises of businesses which provide employment and prosperity. I will give examples from the past six months alone. A young mother was gunned down in a chemist's shop. A 17-year-old boy was murdered while working in his father's shop. A young policewoman on patrol was killed and a male colleague hideously injured by a horizontal mortar fired at their passing vehicle. A pensioner sitting in a bar was murdered entirely at random. Eight workmen returning from their lawful employment were murdered by the detonation of a mine. Five customers in a betting shop were murdered by a machine gunner.
The terrorists, on whatever side, claim to present themselves as soldiers fighting honourably. Some soldiers —and some honour—when they defile their very humanity like this. They have no mandate for what they do. They are bereft of any justification and they have no chance of success—hence their futility, for neither the people of Northern Ireland, nor their Government, nor the Irish Government, will yield to their attacks. I think that this is dawning on them, and I intend to reinforce the message.

The toll exacted would have been far worse were it not for the shrewd and courageous operations of the security forces. The terrorists have been forced to abort many of their intended operations by reason of most valuable intelligence and resulting interdiction. Substantial finds of arms and munitions and numerous arrests have been made. In 1991, 391 people were charged with terrorist-type offences, including 120 with murder or attempted murder. For the first four months of this year, the figures were 140 and 44 respectively.
It is thanks to the brave men and women of the Royal Ulster Constabulary and the armed forces, and the determined and professional leadership under which they operate, that the vast majority of people in Northern Ireland conduct their daily lives in safety and normality. Measures continue to be taken which will further improve the effectiveness of the security forces' operations. Most importantly, last week a second deputy chief constable was appointed. Following a review of the senior command structure of the RUC, he will be responsible for all operational police work, including the gathering of counter-terrorist intelligence and its prompt employment by both the RUC and the Army.

Mr. Kevin McNamara: Will the new assistant chief constable have direction also of Army intelligence gathering, and will the Army report directly to him?

Sir Patrick Mayhew: It is a deputy chief constable, not an assistant chief constable. He will have overall operational control under the chief constable. The primacy of the police being in place, and continuing to be in place, the Army's operations are ultimately under his direction. That is as much so in intelligence as in other operational areas.

Mr. David Winnick: I recognise that the fight against terrorism must always be within the rule of law and that anything else—any murky business that has come to light, or allegations of it—only helps the terrorists. That is my view. Does the Secretary of State agree that when it comes to a mandate, which he mentioned, there seems not to be one for the Provisional IRA? We know that the Provisional Sinn Fein lost a seat in the general election, and all the evidence suggests that there is no majority within the minority community when it comes to voting for terrorism. The Provisional IRA always claims that it speaks for the Irish people as a whole, but when it last contested elections in the Irish Republic it obtained less than 2 per cent. of the vote. Is it not important for these people to recognise that after 22 years of terrifying crimes—the Secretary of State has referred to some of the crimes committed by terrorists in the past six months—in Northern Ireland and on the mainland, they have not achieved anything? Would it not be wise for the terrorists to recognise that the objectives that they have set themselves have not been achieved, or anything like it?

Sir Patrick Mayhew: I agree with every word that the hon. Gentleman has said.
I think that it would be helpful if I summarised, albeit briefly, the principal provisions that we propose shall be renewed in a few days' time if the order is accepted. The Act provides the legal basis for the trial of terrorist-type cases by a single judge—the so-called Diplock courts. It contains special rules on the admissibility of confessions in


scheduled cases. It provides for the discretionary proscription of terrorist organisations in Northern Ireland. It provides the security forces with powers to stop and question, arrest, search and seize. It contains statutory rights for persons arrested to have a person informed of their arrest and whereabouts, and to have access to legal advice, and it regulates the private security guard industry in Northern Ireland.
Last year's Act strengthened the law in several respects. These include new offences of possessing items intended for terrorist purposes, of directing terrorist organisations and of constructing bypasses around border crossing points which have been closed by the security forces. It created new powers for the security forces to examine documents and other recorded data found during searches, to seize equipment used to reopen closed border crossings, and to employ civilian specialists in conducting searches and in investigating terrorist finances.
Last year's Act also introduced new safeguards in the exercise of the emergency powers. These include allowing the security forces to stop and question people about their identity and movement only for so long as is necessary, and requiring particulars of searches of premises, dwelling houses and, in some instances, vehicles to be recorded in writing. The Act requires me to produce codes of practice covering the detention, treatment, questioning and identification of terrorist suspects in police custody and to use the new powers to investigate terrorist finances, about which I shall say more in a moment. It contains provisions for the appointment of an independent assessor of military complaints procedures.

Mr. Ivan Lawrence: I apologise for not being in my place at the beginning of my right hon. and learned Friend's speech. Does he intend to introduce videotape recordings of interviews with suspects in Northern Ireland? As he well knows, having had great responsibility for the matter on the mainland when he was Attorney-General, we are moving towards the practice here as a safeguard against any sort of miscarriage of justice which might result from interrogations. I understand that there is a move towards having the practice adopted for terrorist offences on the mainland. If it is to be the practice on the mainland, as a matter of logic it should be adopted in Northern Ireland. I shall be grateful for any indication that my right hon. and learned Friend can give of his thinking on the matter.

Sir Patrick Mayhew: My hon. and learned Friend asks an important question about a topic to which, naturally enough, I shall be coming in a few moments when I refer to the holding centres. I have no responsibility for what happens on the mainland, but I have responsibility for what happens in Northern Ireland. Perhaps my hon. and learned Friend will allow me to come to the point specifically in a few moments.
First, I shall deal with the terrorists' finances. Lord Colville notes that the new provisions in the Act relating to terrorist finances are very significant. There can be no doubt of the great importance of action disrupting the ability of terrorists and terrorist organisations to finance themselves and interrupting the flow of funds to them. As the Chief Constable has reminded us, in recent years more than 300 people have been convicted of involvement in

illegal funding operations, which were probably worth about £45 million. More recently, terrorists have been engaging in much more elaborate methods of fund raising and of concealing their funds. It was to counter that trend that the special powers of investigation set out in section 57 and schedule 5 were enacted.
I am glad to be able to tell the House that all those provisions are now in force, and the signs are that they will prove extremely useful. They have already underpinned the provisions that were first to be introduced. A recent and major operation was conducted by the security forces called operation Cristo with the full support and co-operation of their counterparts in the Republic. The preparation of the draft code of practice for the conduct of investigations into terrorist finances is nearly finished. When that is completed, it will be circulated for comment before being laid before Parliament.
With regard to the holding centres, it is necessary, as in Great Britain, so in Northern Ireland, that the police should have appropriate powers to detain for questioning people whom they suspect of terrorist offences. Those powers must be subject to safeguards but, as Lord Colville mildly points out, the bringing of the guilty to justice is as much a feature of a proper criminal justice system as is the protection of the innocent from wrongful conviction.
It is essential, however, that allegations of ill-treatment of persons in police custody be dealt with in a way which secures the confidence of the public. The maintenance of the rule of law requires compliance from the police as much as from everyone else. Physical assault is a criminal offence, and abuse of persons in custody is strictly forbidden.
The review discusses in some detail the circumstances in which such allegations arise. Some, as Lord Colville points out, undoubtedly arise for the purpose of undermining public confidence in the police. But whenever a complaint is made against the police it is, as it must be, thoroughly investigated. The evidence is sent to the Director of Public Prosecutions for Northern Ireland who decides, in accordance with his normal criteria, whether any prosecution should be instigated or whether further inquiries are necessary.
Very properly, a wide range of statutory and administrative safeguards for those in police custody exists. For example, an extension of detention requires the Secretary of State's authority. The suspect has a right to have a member of his family or a friend informed of his arrest and whereabouts, and a right to consult a solicitor privately. All interviews are monitored by close-circuit television. They are monitored for the purpose of seeing that nothing is going wrong, but not recorded.
My hon. and learned Friend the Member for Burton (Mr. Lawrence) utters thoughts which, I recognise, are quite widely shared, and they have been considered by the Government in the past. Lord Colville in his report records that the Government have firmly rejected the suggestion that in the interrogation of terrorist-type suspects a television record should be kept. That has been the view of the Chief Constable and it remains his view, and I believe that, having regard to the special circumstances in Northern Ireland, for which I alone am responsible, and the problems of investigating terrorist offences, the arguments against the suggestion outweigh the persuasive arguments which can be put forward in favour of it.
Detailed custody records are maintained in writing. There is a right to regular medical examinations and to a


continuous period of at least eight hours rest in any period of 24 hours free from questioning, travel or interruption. A further reinforcement of those safeguards will be provided by the forthcoming codes of practice that I have mentioned.

Mr. McNamara: It would be helpful if the Secretary of State could inform the House how much has been spent in out-of-court settlements arising from allegations of ill-treatment in holding centres and how it is that such money has been spent although there is not one recorded occasion of any person monitoring an interrogation considering it necessary to stop that interrogation. That contradiction needs some explanation.

Sir Patrick Mayhew: Such matters are not so simple as they sometimes seem. I do not have at my fingertips the figure for compensation awarded as a result of claims brought in that context in recent years, but perhaps my hon. Friend the Minister of State will be able to provide it when he replies. However, it is not easy for such a claim to be defended. It is by no means uncommon for those representing a claimant who has begun civil proceedings to refuse to co-operate with the police. That means that it is difficult for the allegations to be investigated, which has a bearing upon the ultimate decision as to whether an agreed disposal is to be made. It certainly has a bearing upon the disparity between the number of cases which are settled in that context and those which lead to disciplinary or even criminal investigation.
I was referring to the forthcoming codes of practice governing the detention, treatment, questioning and identification of persons detained under the Prevention of Terrorism Act. Before going any further, I should complete that point by saying that we all know there are considerable constraints on disciplinary, let alone criminal, proceedings when a long time has elapsed. If a long time has elapsed, taken up by the progress of a civil claim, that has a bearing on the ability to bring disciplinary proceedings even in a case where, on legal advice, a settlement has been arranged.

Mr. Rupert Allason: Does my right hon. and learned Friend agree that the recording and retention of a tape, even for six months or a year, would prevent a claim from being made in the first place by a suspect who alleges maltreatment?

Sir Patrick Mayhew: Of course I agree with that, but other considerations have to be taken into account, not least among which is the effect that the knowledge that a televised recording is being made of the interview might have, and foreseeably would have, upon someone who in other circumstances might be prepared to speak, knowing that he would have no control over what happened to that tape recording.
I have decided that an independent commissioner for the holding centres of Castlereagh and elsewhere shall be appointed. His duty will be to visit the centres on a random basis so that Ministers and the general public may be assured that the safeguards and procedures to protect the interests of persons detained are being fully implemented.
The lay visiting scheme introduced by the police authority has undoubtedly been a success and the commissioner scheme will draw heavily on that experience. I shall be consulting the Chief Constable and the police

authority on how the arrangements for the commissioner scheme should be carried forward and I shall make a further announcement soon.
The reliability of statistics is obviously an important factor in securing public confidence that all is well. Lord Colville has shown that there is substantial room for improvement here and that is being taken in hand. We are examining his other proposals closely. For every reason it is desirable for us to take all practicable steps, as he recommends, to secure comprehensive, contemporary records of what happens when someone is detained in custody, and that we propose to do.
I come now to how we should handle questions of police and Army conduct. I know that we all agree that the conduct of individual police officers and soldiers is central to their operational effectiveness. Any security force activities which break the law, or otherwise fall short of the professional standards required, will not be met with a blind eye. They will be impartially investigated, as is happening in connection with events at Coalisland, East Tyrone, at present. Where the necessary evidence exists, it will be reported to the Director of Public Prosecutions for Northern Ireland.
Those are precisely the standards that the security forces set themselves, which their arduous training inculcates and which all units—I emphasise all units—strive to maintain. I ask the House and those outside to remember that there is constant interaction between the security forces and the public, the vast majority of it friendly and with no hint of friction.
However, complaints, sometimes entirely justified, are made and the timely processing of complaints is an important part of the maintenance of good relations with the community. Lord Colville mentions that the Army is now setting itself targets for the speedy resolution of formal complaints made to it. That is part of the process that I am describing, and I intend shortly to announce the appointment of an independent assessor of military complaints procedures under the power contained in the Act.

Mr. Seamus Mallon: Will those powers allow the investigation of a complaint from any member of the public—or from the House—about the activities, behaviour and standards of very senior officers who may still be involved in army intelligence, specifically in the force reconnaissance unit, or will they simply apply to the squaddie on the street?

Sir Patrick Mayhew: The terms of assessment for the independent assessor of military complaints procedures will have to be worked out. I understand the hon. Gentleman's point, however, and I think that he can take comfort from the fact that there is no doubt in the minds of the Army authorities, the police authorities or the Government that the rule of law must be maintained. If criminal allegations are made, they will be investigated. If complaints are made about the conduct of soldiers they, too, will be investigated within this procedure. I cannot tell the House the terms of reference, but it will be up to the authorities I have mentioned to decide whether, ultimately, the hon. Gentleman's question is answered in the affirmative.

Mr. Mallon: Will the Secretary of State reinforce the view expressed by his predecessor, the right hon. Member for City of London and Westminster, South (Mr. Brooke),


in an earlier debate? The right hon. Gentleman said then that no member of the security forces, however junior or senior, would be allowed to act in a way that was not compatible with the law. Will the Secretary of State put it on record again that no member of the security forces or of the general public in the north of Ireland will be allowed to act above and beyond the normal law?

Sir Patrick Mayhew: The hon. Gentleman knows perfectly well that the answer to both questions is yes, without qualification.
Border crossings are also discussed in the review. Lord Colville bestows deserved praise on the security forces for their efforts to deal sensitively and quickly with the community issues that are bound to arise from the need to resite and modernise permanent vehicle checkpoints. He gives a number of examples of the use of the powers conferred by the Act in border areas, which illustrate their importance.
My hon. Friend the Minister of State will have more to say about that when he winds up the debate, but let me say now that the efforts of the Garda and the Irish army in the fight against terrorism also deserve praise. Their diligence and professionalism have already led to a series of major arms finds and arrests this year. That includes the discovery of more than 1,500 kg of home-made explosive in Donegal, and of 51 rifles, two machine guns and 20,000 rounds of ammunition in Cork.
Mr. Flynn, the Irish justice Minister, has said that those discoveries have almost certainly saved lives, and I readily endorse that. The Irish Government share our determination that terrorism should not prevail, and we work closely with them to ensure that co-operation on the ground is close. Much has been achieved, but much undoubtedly remains to be done to ensure that terrorists—whether in the north or in the south—cannot escape justice.

Rev. Ian Paisley: Why do we continually hear reports on the radio that groups of people have met at the border, and that border crossings closed by the Army have been reopened? Neither the Garda nor the Royal Ulster Constabulary seem to be taking any action to deal with people who are deliberately breaking the law.

Sir Patrick Mayhew: I recognise the basic desire of people in the neighbourhood to be able to cross the border. North of the border, however, there are criminal sanctions against the reopening of crossings which have been lawfully closed by the security forces, while south of the border such powers do not exist. We are discussing the matter with our counterparts in the Irish Government and, as with other issues, we hope to achieve much more by way of co-operation in our effort to ensure that terrorists from both sides of the border do not escape justice.

Mr. Michael Colvin: Will my right hon. and learned Friend give way?

Sir Patrick Mayhew: I am watching the clock, and I know that many other hon. Members wish to speak. I will give way for the last time.

Mr. Colvin: The question of frontier controls is very important. It has been suggested that frontier controls between member states will be unlawful in the EEC. If, for instance, the European Court ruled against such controls

and they are therefore bound to be removed, could that not lead to the introduction of the carrying of identity cards within the Province? Might not that help the security forces rather than hindering them?

Sir Patrick Mayhew: There is nothing to prevent member states from maintaining security controls. My hon. Friend knows very well the difference of opinion between the British Government and others about the effect of treaty legislation in that context.
Time spent on remand in custody is probably the last topic in Lord Colville's report with which I shall deal. It is an important subject. Lord Colville refers to the recommendation, in his report on Belfast prison, about the need to reduce the time that prisoners spend on remand in custody in Northern Ireland. My predecessor accepted that the case for cutting such remand times was "unanswerable". I agree, and the agencies involved in the prosecution process share my anxiety.
We have accordingly decided to introduce a special scheme in Northern Ireland, aimed at reducing and monitoring the time defendants spend in custody before they are tried on indictment for scheduled offences. The scheme will start on 1 July. It will impose administrative targets for scheduled custody cases, which present the most serious delays. The targets set will be to take such cases from first remand to committal stage in 38 weeks; and from committal to arraignment, when the defendant enters his or her plea, in 14 weeks—a period of 12 months overall from first remand to arraignment.
Those targets are challenging, and will require a significant improvement in the processing of such cases in Northern Ireland. They can be achieved only through the agencies' having agreed—as they have—to introduce new arrangements to monitor closely the progress of the cases involved, and to introduce new reporting arrangements for cases which are in danger of overrunning.
I should have preferred to introduce even tighter time limits straight away. I have had to conclude that that is not a reasonable realistic expectation for the time being, but I emphasise that I wish to see further reductions in remand periods over and above those being introduced in the next few weeks. I have naturally considered whether to introduce a statutory scheme, but I have had to reject that option because I cannot at present be satisfied that it could operate without a real risk of dangerous people being released.
I believe that the measures that I have outlined today will lead to a significant and welcome improvement in the time scheduled remand prisoners spend in custody and will lay the necessary foundations for sustained and continued improvements for the future. They are designed to ensure that Lord Colville's wish to reduce remand times is given substance, and will start to be realised.
I know that the whole House will wish to express our deep gratitude and admiration to the security forces, and the prison service, for their dedicated and frequently dangerous work. We ask so much of them, and I believe that we get it in a measure that no other country could begin to approach. The Government are determined that the necessary resources, in terms both of manpower and equipment and of an appropriate framework of law, shall be in place to enable them to carry out their duties successfully.
Finally, I pay particular tribute to the long-suffering people of Northern Ireland who endure bravely, with


resolution and resilience, an ordeal which has gone on for more than 20 years. Given the subject matter of today's debate, it is inevitable that our focus should principally be on security matters, but that is only one element of our policy on Northern Ireland. Social and economic programmes and the pursuit of constitutional, political progress are fundamental to a just and tranquil future for the people of Northern Ireland. Those policies affect far more people directly than those who will ever encounter personally the emergency legislation that we are discussing.
It is my most earnest desire, and that of the Government, to help the people of the Province to secure such a future. Meanwhile, we shall continue to confront terrorism with unremitting resolution, by the careful deployment of all the formidable measures and means made lawful by the legislation which is justly provided for that purpose. I commend the order to the House.

Mr. Kevin McNamara: These renewal debates have become a traditional occasion for the House to reflect on security developments, to listen, as we have with interest, to the fresh developments that the Secretary of State outlines and to consider the general security position. I wish only that the paramilitaries of all persuasions would occasionally stop and reflect on the lives that they take, that they wreck and that they lay down themselves. Perhaps they might then realise the awful waste, hurt and despair that they create.
Although I am not so convinced about the commitment of some Conservative Members to civil liberties that I can argue that the legislation would no longer exist in the absence of terrorism, it must be clear that there would be no pretext or justification for the order if the paramilitaries stopped the killing.
We recognise that some emergency legislation may be necessary, but we cannot support the order. Our reasons have been well rehearsed, particularly in debates on the Northern Ireland (Emergency Provisions) Act 1991. As long as the power of internment remains in the legislation, even if it has not been activated, it is unacceptable to Labour Members. It is a constant reminder of the unacceptable face of the state and an admission of political failure.
Like the Secretary of State, I should like to express, on behalf of the Opposition, our admiration for the courage and resourcefulness of members of the RUC, the Army and the prison service. We ask them to do a difficult job and, by and large, they do it professionally and effectively.
The Opposition fully support the police and the Army in their efforts impartially to uphold the rule of law. That is why we view with concern any departures from the high standards that are set by the vast majority of police officers and soldiers. Any such departures damage public confidence in the administration of justice and make life more difficult and dangerous for the security forces.
I should like to quote Sir John Hermon:
This is not some simplistic war being fought, this is a complicated political, social and community problem which requires handling with the utmost sensitivity and understanding.
The Opposition therefore view with deep concern the allegations about the ill-treatment of detainees at the Castlereagh holding centre. For the first time, Amnesty

International has issued an urgent action alert in connection with incidents within the United Kingdom and associated with Castlereagh.
In many cases, detainees have subsequently received compensation as a result of their detention and their treatment while in custody. I regret to say that I find the sections of Lord Colville's report on this issue far from convincing. If there is any evidence that moneys paid in compensation end up in the coffers of terrorist organisations, one would expect criminal charges to ensue, for that would be a criminal offence. There has been no sign of that, no evidence and no cases brought.

Mr. Mallon: Does the hon. Member agree with Lord Colville's comment in the report that the people of Northern Ireland are "highly litigious by nature"?

Mr. McNamara: It is always dangerous to make sweeping comments about any particular nation or people. I prefer to judge people on their individual merits.

Mr. Mallon: Does the hon. Gentleman believe that such a comment, in what is supposed to be an impartial assessment of legislation, is advisable?

Mr. McNamara: I regard it as an undesirable statement to make about any group. I believe that one should deal with people as individuals. To make sweeping generalisations without taking into consideration the circumstances in which the litigation arises is, I think, not the wisest course to take. I was surprised to read what the noble Viscount said.
Until such time as adequate and credible safeguards are put in place at Castlereagh, those allegations will continue to gain credence. The damage that such incidents do to confidence in the security forces should be well known by now. Neither they nor police officers will be safe from false accusations until safeguards are established.
A number of options have been advanced to provide conditions in which the RUC can conduct its investigations in a correct and effective manner. It cannot help the pursuit of justice if the police are not seen to be above suspicion.
I deal now with the point that was made earlier by the hon. and learned Member for Burton (Mr. Lawrence). Perhaps the most satisfactory safeguard would be video-recording suspects' interviews. This has been a long-running controversy, and the arguments on all sides are well known. I regret that Lord Colville seems to have given up hope on the suggestion. His previous report contained the most persuasive case and arguments in its favour—far more persuasive than the present report.
We hope that the Government and the Chief Constable will finally see sense on this issue. Television recordings can protect the identity of the interrogating officer—the techniques are simple—and can prevent accusations about a blow being struck. It is possible to tape-record interrogations in such a way that an application could be made to a judge in chambers if it were felt that the transcript of sensitive intelligence material was likely to fall into the wrong hands, provided that it was not dependent on the bringing of the case. The Minister of State shakes his head in disagreement. If he would like to say why, I should be happy to give way. He does not take the point.
In paragraph 6.5 of his report Lord Colville quotes from a letter that we should seriously consider. It says:
The damage to the reputation of the RUC and the United Kingdom as a whole which results from the continuing


publicity, if not credibility, given to these allegations far outweighs any marginal advantage which may account to the security forces from the absolute privacy surrounding the interrogation process.
It is worth repeating that
the continuing publicity … given to these allegations far outweighs any marginal advantage".
I would have hoped that, with the arrival of a new Secretary of State, there would be greater appreciation of the need for that safeguard to be introduced, especially if it is to be introduced on this side of the water and if it is also to be used in terrorist-related offences on this side of the water.
There are other forms of safeguards that could be employed more efficiently, some of which the Secretary of State outlined. One is ensuring that detainees have a genuine right to legal advice, a right that is severely qualified at present by time and other matters to which the Secretary of State referred. It would be helpful if he could explain the stark contrast between the practice in Northern Ireland and that on this island. In Britain, detainees under the PTA have legal representation as a matter of course, and the fact of detention is usually broadcast all over the place by the police. In Northern Ireland, suspected terrorists are routinely denied access to legal advice and held incommunicado. Why the difference? 
I regret to say that the arguments used in defence of the status quo are unworthy of those who advance them. Essentially, it boils down to a suggestion that the legal profession is not to be trusted. If true, it would be an appalling indictment of the condition of Northern Ireland society. Allegations about and insinuations against members of the legal profession are not only disgraceful but dangerous, as the murder of Mr. Finucane showed.
Even in a recent book called "Big Boys' Rule" by Mark Urban, the degree to which the slur on the legal profession is maintained is clear. Accepting it as gospel and producing no evidence at all, he states:
There is undoubtedly a community of republican lawyers, supported financially by the movement, which is prepared to act in ways which might be considered unusual in Britain. For example, the lawyer may agree to pass a message from a terrorist to his commander, or might use cross-examination of a security force witness in an attempt to probe whether an operation had resulted from a leak within the IRA.
Despite such insidious suggestions, no member of the legal profession has ever been prosecuted for abusing his or her status as an officer of the court on behalf of terrorist organisations or individual terrorists; nor have any complaints been made to the appropriate disciplinary bodies. I am sure that the Secretary of State, as a former Law Officer, should have a particular interest in defending the right of defence and ensuring that there is full appreciation of the fact that lawyers acting for the defence are as important for the rule of law as judges and prosecutors.
The Secretary of State announced in skeleton form his suggestions for an independent visitor or commissioner to attend the holding centres. He did not say why he could not accept immediately the recommendation of the Police Authority for Northern Ireland that ordinary lay visitors should attend the centres. He did not say to whom the new commissioner will be answerable; nor has he given any details of the commissioner's precise powers or the statutory basis of those powers. It would be far better if the

authority's proposals for lay visitors had been accepted, but we shall consider with interest what has been suggested.
It is also interesting that the Secretary of State announced that the gentleman or lady who is to examine procedures in the Army is to deal with complaints. The fact must be taken on board that it is a power not to examine the substance of complaints but only to examine the procedures for dealing with complaints. That is a very different matter.
A number of recent developments have cast some doubt on the policy of police primacy. We believe that, although there are obvious difficulties, the principle that the police should be responsible for law and order is vital if there is ever to be normal society in Northern Ireland. Any deviation from police primacy is a setback for such hopes. Recent incidents such as those in Coalisland are under investigation by the RUC, so any detailed comment would be inappropriate. However, many people would like an answer to the question, "Who is in control?" The Secretary of State tried to answer that question and said that the control rests purely with the police. It must be said that recent experiences and experiences of what is happening now tend to suggest that on occasions the police are not and have not been fully in control.
Can the Secretary of State therefore assure us that he is satisfied with the preparation now being given to military units before they come to take up service in Northern Ireland and that there is adequate supervision of the military by the police? No one should seek to underestimate the difficulties and frustrations experienced by young soldiers who live with the constant risk of death or injury and fear of ambush, but it is precisely discipline and respect for the law that distinguish the legitimate armed forces from their terrorist opponents. That is something on which we all agree and must insist.
As the role of the Army is to assist the civil power, can the Secretary of State give a further assurance that the RUC has control over the deployment of the military forces and that the requirements of the police take precedence over military rivalries? There has been a recent case in which military disrespect for the authority of the RUC reached frightening proportions—I refer to the case of Mr. Brian Nelson. If the allegations in Monday night's "Panorama" programme are accurate, there is great cause for concern about the operations of the security forces in Northern Ireland.
The Nelson case raises serious questions. These are not matters that can be swept under the carpet—they go to the heart of the issue. Is Britain serious about upholding law and order and establishing a society in which all sections of the community will be fairly treated, or is Northern Ireland an adventure playground for secret agents? I hope and believe that the former is true. If not, we will have dealt a massive blow to all the efforts of those working for peace and justice, especially the thousands of police officers and soldiers who go about their difficult jobs with dedication and integrity. However, if the Secretary of State wants to convince us that all sections of the security forces operate within the law, some explaining still needs to be done.
We know that Mr. Nelson violated the law but, as he was an agent of the force reconnaissance unit, it is difficult to understand why his criminal activities developed to such an extent and why he alone was subject to prosecution.


Surely some of his handlers were accessories before, and certainly after, the fact of some very evil deeds, but they allowed him to continue.
We presume that a review of the relations between the various intelligence gathering agencies has taken place since the arrest of Mr. Nelson. Indeed, the announcement of the appointment with which the Secretary of State began his speech is proof of that, but can we now assume that the RUC's special branch has the full co-operation of military intelligence, that police primacy in intelligence is a reality and that no agents will be run by any bodies without the knowledge of the police?

Sir Patrick Mayhew: indicated assent.

Mr. McNamara: The Secretary of State nods his head in agreement, and that is welcome.
The Nelson case also demonstrated the importance of guidelines for the use of agents. Colonel J, the commander of the FRU at the time, argued that the Home Office guidelines were inapplicable in Northern Ireland. Is that true? If so, have new, specific guidelines for Northern Ireland been introduced to prevent agents indulging in the kind of mayhem perpetrated by Mr. Nelson and his miscellaneous colleagues? Do Home Office guidelines rule in Northern Ireland or are there different guidelines? 
I seems clear that the Nelson operation yielded next to nothing to the RUC. Do the Secretary of State and the Government stand behind the claim that Mr. Nelson saved more lives than he destroyed? The House would also be interested to hear what arrangements have been made to prevent the recurrence of such an extraordinary case.

Mr. Phil Gallie: The hon. Gentleman refers to those incidences on the basis of media reports. I wish to point out the dangers of doing so. A programme broadcast some time ago entitled "Death on the Rock" was acclaimed by the British Academy of Film and Television Arts and won an award. But that programme was based on very unreliable witnesses. Bearing in mind the media content of the hon. Gentleman's speech, will he join me in asking the recipient of the award, who obviously did not do his research, to return that award?

Mr. McNamara: I welcome the hon. Gentleman's interjection in the debate. First, the killing of three unarmed people when no bomb was in evidence and for an event that was supposed to take place in three days' time, with evidence given by people behind screens, makes me extremely worried about the handling of such matters by the security forces in this country and Gibraltar. Secondly, the transcript of much of Mr. Nelson's trial revealed many of the facts that I have stated. Thirdly, I am aware of no action that has been taken against the producers of that programme, nor of any comment by Government sources that it was inaccurate in any detail.
"Panorama" also made specific accusations that are so appalling that the truth must be established as quickly as possible and remedial action taken if necessary. Did the FRU help Mr. Nelson to turn the chaotic files of the UDA into effective intelligence? Did Mr. Nelson give five warnings prior to the murder of Terence McDaid? If so, why were they ignored? 
Will the Minister of State explain when he winds up why the FRU attempted to conceal evidence from Mr. Stevens, a senior police officer appointed by the Chief

Constable of the RUC? What action was taken against those responsible? Why were they not proceeded against for seeking to pervert the course of justice? 
By now, the South African connection with loyalist terrorists is beyond doubt. I cannot understand why the representatives of a state that colludes with terrorists to kill inhabitants of Northern Ireland are still permitted to fly their flag in Trafalgar square. If "Panorama" is to be believed, matters are much worse than previously suspected. A military intelligence agent appears to have been involved in arms shipments from South Africa, which were allowed to enter Northern Ireland and were later used in at least eight murders at the Milltown cemetery and the bookies on Ormeau road.
I can only conclude that the sooner South Africa has a democratic Government, the better for Northern Ireland. I am particularly concerned that agents who were involved in those terrible mistakes might still be active or involved in the security forces.

Mr. Andrew Hunter: I urge the hon. Gentleman to maintain fairness in his comments, because the South African connection clearly runs both ways. As long ago as 1969, and reinforced in 1978 and 1984, the IRA acknowledged its support for and co-operation with the African National Congress.

Mr. McNamara: I have listened to the hon. Gentleman on that subject in the past but have never found that his comments have much substance. May I make one thing clear: we are not swapping tit-for-tat allegations between nasty, mean terrorist organisations, but discussing the role and conduct of the British Army. We condemn the IRA and all the other terrorist organisations out of hand. We are discussing the standards that we expect from our forces.

Mr. Mallon: Is the hon. Member for Basingstoke (Mr. Hunter) aware that a Sunday newspaper that carried a comment of his has paid substantial damages to a constituent of mine because of exactly the same kind of nonsense that he has spoken today? That is a matter of quantifiable fact.

Mr. McNamara: That "Panorama" programme made a serious allegation against the right hon. Member for Bridgwater (Mr. King). I hope that he will make a statement at the earliest opportunity to clarify matters. The programme alleged that, when he was at the Ministry of Defence, the right hon. Gentleman or someone acting on his behalf wrote to the Director of Public Prosecutions while he was considering the evidence against Mr. Nelson to say what a valuable agent Mr. Nelson had been to the Army. Is that true? 
The Secretary of State is obviously not prepared to reply to my question. It is important because, if it is true, it means that a senior Cabinet Minister, or subordinates acting on his behalf, attempted to lean on the DPP while he was considering whether to bring charges against a man accused of the most terrible terrorist crimes. If it is true, it is another hammer blow to the independence and credibility of the criminal justice system. It means that a senior Minister interfered in the course of justice in a Department to which he is not directly related that was seeking to decide, on the evidence before it, whether charges should be brought.
Yesterday, The Independent made other allegations from which various inferences can be drawn. It may reflect on the allegation, which the Secretary of State does not seek to contradict, made in "Panorama". It said:
Early in 1987, Colonel J's superiors came under pressure from Tom King, then Secretary of State for Northern Ireland. According to one source: 'King was complaining—"Where are your successes?" The clear message from King was: "You must do better."'
One of the FRU's responses was to seek clearance to insert a new agent into the loyalist paramilitary groups. This was opposed by MI5, which argued that the Special Branch had already penetrated the Protestant paramilitary organisations with its own agents.
The Special Branch was not even informed, but Colonel J, with political backing, was able to overcome MI5's objections and Brian Nelson was recruited.
The effect of Brian Nelson's recruitment, against the advice of MI5 and without special branch being informed —allegedly because of political pressure—resulted in all the evil consequences that we have seen.
I hope that the Government will realise the significance of those matters and will not treat them with their usual complacency. If we want the rule of law to prevail, we must respect it ourselves and we cannot write to the DPP pointing out the value of a particular agent.
There are no short cuts to a solution in Northern Ireland. There may be temptations to cut corners with the rule of law. Indeed, the legislation on which we are voting tonight shows not only what happens when we yield to that temptation but leads us into more temptation. We do not want the Government to lead us into temptation; we want them to work to deliver us from the evil of terrorism. We do not believe that they are doing that adequately and, for that reason, we shall vote against the order.

Rev. Ian Paisley: I do not—[Interruption.]

Mr. McNamara: On a point of order, Madam Deputy Speaker. The statement has just been made, which you may have heard, that I did not give the right hon. Member for Bridgwater (Mr. King) notice of my question. I wrote to him today:
Dear Tom,
Just a brief note to inform you that I shall be referring to the Nelson Case and your part in it in tonight's debate.
Yours, Kevin McNamara.
The note was on the board at 2 pm.

Rev. Ian Paisley: I do not propose to follow the remarks of the hon. Member for Kingston upon Hull, North (Mr. McNamara). Nobody should be tried in this House on speculation or media presentation. Nor should a Member of this House be entitled to say to another Member, "I give you an opportunity to reply" and take his seat. If the allegations are of such a serious nature—the hon. Gentleman went on for some time—how can proper clearance be made in an intervention? Unfortunately, it seems that in tonight's debate the hon. Gentleman has made a long and serious accusation against the Army and has moved away from the fact that we need to defeat terrorism. That is what is important. I am sure that the hon. Gentleman will forgive me if I do not follow all the ramifications of his speech.
As the first Member from Northern Ireland to be called in this debate, I should like to pay tribute on behalf of the Northern Ireland people to the gallant special constable, Glenn Goodman. I salute his memory tonight, as do all right-thinking Ulster people. I also salute the courage and integrity of his wife. I assure her that what she said tonight is what many widows in Northern Ireland have said. I salute her as a courageous woman who deserves the sympathy of the whole community and our praise.
Yesterday, the chairman of the Royal Ulster Constabulary Police Federation, Mr. Beattie, said:
If war weariness is affecting the community it is not quite sufficiently evident yet among our politicians. For those of us on the outside of the political talks it seems that progress is extremely disappointing …
It will also be much more tragic if we allow the paramilitaries to fill the political void by claiming that their murderous activities reflect the frustration of ordinary people with the political process.
I utterly deplore Mr. Beattie's remarks. Since he was appointed to his office, he has had the habit of making remarks against politicians. Yet when he is challenged he does not name them—he says, "All politicians".
The elected Members of Northern Ireland have had no say whatever in controlling the security strategy of the police, the Army or the Ulster Defence Regiment during the troubles since Stormont was abandoned. We have had no responsibility whatever. Over and over again the elected politicians of Northern Ireland are blamed for failures in a strategy for which they are not responsible. This House took into its control the entire war against the IRA and any other terrorist organisation in Northern Ireland, and it is responsible. Successive Governments, whether Labour or Tory, are responsible—not us. I want to make that perfectly clear tonight.
There is a contradiction between Mr. Beattie's two paragraphs. First, he tells us that he is disappointed, although he is outside the talks, that this war weariness has not caught up with the politicians. I have news for him: the people of Northern Ireland are not war weary and the men whom he pretends to represent are not war weary. I challenge him to hold an opinion poll of the members of the federation and to announce the results publicly. The ordinary man in the street and the policeman who has to carry out his task is not war weary. He does not want the politicians in Northern Ireland to cobble up some miserable betrayal and then pronounce that it is a recipe for peace. Mr. Beattie does not know what is going on behind the doors in Stormont and he will not hear about it from me. Mr. Beattie should mind his own business and not pillory Northern Ireland politicians.
Mr. Beattie then makes the strange statement:
if we allow the paramilitaries to fill the political void by claiming that their murderous activities reflect the frustrations of ordinary people with the political process.
That statement contradicts his first statement. He wants to blame politicians and then he attacks ordinary people as if they would think it right that paramilitaries should act in that way because they are frustrated. I will leave Mr. Beattie to carry out his opinion poll and I look forward to seeing the result next time he brings out his glossy magazine. Knowing the policemen, their wives and families, as well as the bereaved and the awful suffering that they have endured, I can tell the House that war weariness is not apparent in them or in the ordinary people of Northern Ireland. They will not give in to any plan of surrender or compromise.
Explanations and exercises of so-called understanding terrorism, how it operates and why we must work this way and that way will not defeat terrorism. The men and women of Northern Ireland do not crave for the philosophies of certain politicians and others to explain to them why we have terrorism in the Province. Every day they see the full force and tangible reality of a terrorised existence. They know from desperate experience and personal scarifice that there is terrorism, and they want that terrorism stopped. They look to the Government, who are now responsible for controlling the strategy of the fight against the IRA and other terrorists, to stop this war. No amount of political initiatives or talks will bring the violence to an end. Politicians are not plenipotentiaries for the billigerents. Indeed, the belligerents are not at the talks table and I trust that no Government will ever bring them to that table: they need to be told that they cannot bomb their way to it.
What I see is yet another endeavour to give respectability to the IRA. I do not believe that there is any difference between Sinn Fein and the IRA. One cannot carefully package part of a terrorist organisation, call it by another name, sit down with its representatives and engage in a dialogue with them, claiming that by that means they will be encouraged to persuade the IRA men to leave their weapons and stop their murders. Sinn Fein is part of the IRA, and it has pulled off a great propaganda stunt. Now its members can say, "Oh, but the clergymen accept that we are not the IRA." Today, another effort has been made to give credibility to these murdering thugs and to those who speak for them and justify their diabolical wickedness and are part and parcel of their organisation.
The sooner the Government and the House learn of their awesome responsibility to seek to protect the citizens of Ulster by extinguishing terrorism, the better it will be for everyone. Emergency legislation, military and police manpower, superior fire power and vast amounts of expenditure on security will not in themselves bring an end to terrorism. They are the ingredients, but without the proper strategy they will never bring an end to the conflict.
The Government and the House must have the will to win the war against the IRA republican terrorists, who kill three times as many people as any other organisation in Northern Ireland. What I say about the IRA, I say about other terrorist organisations, some of whose members are referred to in the House as "Protestant" paramilitaries. I never hear IRA men referred to here as "Roman Catholic" IRA men. The House should realise that it is an insult to the Protestant people and the Protestant ethos to say that terrorists are Protestants. Terrorists have rejected the very ethos of Protestantism, which is the belief in civil and religious liberty for all men. All terrorists must be crushed, and we must face up to the IRA now.
Pandering to the political needs of the IRA by permitting members of Sinn Fein to have a role, however minor, in the political institutions of the land legitimises the organisation's message and gives it hope. Its members thrive upon the hope that, some day, they will be at the table. An ecumenical clergyman whom I heard speaking in the general assembly of the Irish Presbyterian Church argued that, even if the four parties at the table in Northern Ireland reached a settlement, the fifth party would still be at loggerheads and the problem would still be with us. Given that sort of thinking, Ulster people must ask themselves what the end will be.
The Government should show their will to extinguish any hope that the terrorists may have by proscribing Sinn Fein and bringing its members to justice for illegal activities. If the Government know of other organisations that should be proscribed, they should proscribe them. They are responsible, and they must do what it is their business to do.
Neither the vast sums of money spent, nor increased RUC and military manpower will defeat the IRA. It is the proper allocation and deployment of that money and manpower that will defeat it. The security policy of Northern Ireland must change, and change significantly.
The reactive mentality of protectionism must change to a proactive mentality of dynamic aggression against the terrorists. The security forces and not the terrorists must take the initiative. One cannot win the war against the IRA by spreading the security forces in an attempt to protect all IRA targets. If, as Government sources tell us, there are about 500 IRA men, why cannot they be monitored and marked by the security forces and dealt with when they try to pursue their campaigns of murder? The time has come for a change in strategy and in Government policy.
We must also get off the treadmill of emergency legislation. We are debating yet another renewal tonight, and emergency legislation has now become the norm. This is the way we live in Northern Ireland: the norm is terrorism and murder. It has become normal for our children to be brought up against that background. My children are past 20 and, every day of their childhood, they heard of policemen being murdered, of bombings, killings and awful attacks. We must break away from that norm, and ask what emergency legislation does. It serves only to maintain the status quo, and we shall not get anywhere without a change of strategy.
Emergency legislation is the excuse that successive Governments have used to maintain the status quo. The law-abiding people are willing to forgo some of their civil liberties if it means an end in the short to medium term to the nightmare, but they are not willing to give them up indefinitely just so that the Government can maintain the status quo. That should not be the motivation behind the legislation that the Government introduce. The motivation ought to be to deal effectively with the violence, to nip it in the bud, and to bring about stability and peace—and not allow the emergency situation to be institutionalised by time, which is what is happening.
The Unionist population is not convinced that the present Government have the will to defeat terrorism, not just in condemnatory, graphic, melodramatic descriptions but by definite actions that strike at its heart. Actions speak louder than words. The people of Northern Ireland have no confidence in the Government's will to deliver peace. They say, "Give us an effective security policy and you will get our full confidence and support. Let us see the job being done." The IRA and all its fellow travellers—those who talk to it—are deceiving themselves when they say that they are interested in political progress. They are more concerned with inflicting the vilest crimes on a free people to ensure that, in any political statement, they can call the tune.
What would Ireland be if the IRA won the war? What sort of settlement would it be? Who would want to live in an Ireland controlled by the IRA? In the infant days of the Irish Free State, the new Government under Michael Collins demonstrated its determination to extinguish


violence. There was resolution and determination—a lesson which the British Government should learn from Irish history.
So much money has been wasted in Ulster because the Government have not destroyed terrorism. In January this year the total compensation paid out over the past nine months was £22.8 million. Provision for bomb-damaged property between January and March was a further £10 million to be paid on compensation claims. If the Government pursued a policy of inflicting injury on the IRA, there would be no need for that expense. Targets are many and terrorists are few. We cannot expect the police to protect every possible target. They ought to be deployed against the terrorists.
We must also consider the disruption. The City of London has witnessed the kind of disruption that the IRA has caused in our city. The disruption that terrorism brings robs our city and Province of employment and investment. Last year 19 days were lost due to traffic being thrown into chaos because of bomb alert hoaxes. One hundred and forty-three vehicles have been hijacked in the past 12 months in an attempt to bring our city to a standstill. In respect of only 23 of those hijackings of vehicles was anyone arrested, brought to court and tried.
In the past 12 months, bomb disposal experts responded to 1,758 call-outs. That was the highest total in 13 years and it looks as though the record will be broken again this year. Those are the sad statistics. The largest bomb ever used in Northern Ireland was defused at Annaghmartin. Massive bombs were exploded in Glenanne, Kilrea, Markethill and Craigavon. That is what has happened since we last discussed these matters.
The spiral of appalling killings is becoming more horrendous as 1992 advances. Forty-seven people have been killed already this year, 45 of them civilians. More than 12,000 troops are in Northern Ireland. In all, there are about 35,000 security personnel in the Province. Yet the Government assure us that there are only 500 active terrorists. Why, then, cannot the security forces do something to deal with the problem? The spiral of vile criminal activity will continue for as long as the current inept attitude of the Government is permitted to continue. Emergency legislation can be successful only if it is backed up with effective action.
We heard from the Secretary of State about border security. I was not satisfied when he said that the people who open the roads in Northern Ireland cannot be prosecuted because there is no law in the south about that. Those people come into Northern Ireland and do that particular job. We hear about it continually on the radio. Public figures and representatives advocate opening roads. No effective action seems to be taken against that.
I could repeat the things that I have said over many years in this place, but I do not want to weary the House. Northern Ireland can climb out of the litany of failure only if democratic structures are nurtured and the security forces are given the opportunity to deal with the problem.
The one point with which I want to deal tonight is the attitude of the Irish Government in deliberately refusing to extradite people wanted in Northern Ireland and the United Kingdom for terrorist attacks. The list of IRA men

freed in the Irish Republic yet wanted in the United Kingdom continues to grow, despite claims and promises that the law will be reformed.
In February 1990 there was the case of Clarke and Finucane—convicted IRA murderers who had escaped from the Maze prison. They were released by the Irish Supreme Court on the spurious judgment that if they were returned to the Maze they would be "assaulted or injured." Such allegations do more to destroy any hope of good cross-community and cross-border relations.
In 1990 the courts in the south refused to extradite Owen Carron him for political offences. The political offence was the possession of firearms. In December 1988, in the case of Patrick Ryan—the most notorious case in recent Irish history of extradition—the Irish Attorney-General permitted that priest to go free on the basis that he could not receive a fair trial if he was extradited. Patrick McVeigh, who was wanted for charges of bombings in the United Kingdom, had his warrant refused by the Irish court on the basis that it was faulty.
In August 1986, John Gerard O'Reilly, who was wanted in Belfast on charges of conspiracy to murder, was released in Dublin because the warrants were defective. In March 1986, Evelyn Glenholmes, a triple IRA murder suspect, was released in Dublin because of alleged faulty warrants. In December 1985, Brendan Burns, who was wanted for killing soldiers in Northern Ireland, was released because warrants were declared invalid.
In December 1982, Dominic McGlinchy was wanted for murdering an elderly postmistress. The Irish Supreme Court ruled that such a murder was not a political offence, and he was the first suspect to be extradited to Northern Ireland for trial. At his trial in Northern Ireland, he was acquitted—I am sure that he would agree that it was a fair trial—and re-extradited to the Republic, where he was jailed for other offences. The excuse that suspects would not get a fair trial in Northern Ireland has been exploded —it is a myth. Claims that suspects will receive an unfair hearing in the United Kingdom courts are purely fictional. Two years after the McGlinchy episode, Seamus Shannon was returned for trial in Belfast in connection with the murder of Sir Norman Stronge and his son. Shannon was acquitted.
Other cases in which suspects have been extradited include Gerard Harte, who was extradited in 1988 and gaoled, Robert Russell. who was extradited in August 1989 and regaoled, and Paul Kane, who was extradited in April 1988 and regaoled.
Those extradition figures show the absolute failure by the Republic to keep faith with its claim of wanting to be a good neighbour. The IRA can openly abuse the border as a safe haven, and the Irish Supreme Court openly sanctions such claims. It is little wonder that the northern majority refuse to participate in any proposed cross-border relations.
In 50 per cent. of those extradition cases in which the British Government have been successful in extraditing a suspect, the suspect has been acquitted, thus making a mockery of the Irish Supreme Court's claim that those who are extradited to Northern Ireland for political offences will not receive a fair trial.
The time has come when the Government must look carefully at the problem of those who are held in Castlereagh. I do not see any difficulty in showing a video without sound, indicating whether an officer approaches a prisoner, whether he strikes a prisoner, or whether he does


anything that he should not do. I do not see what the objection is. There are some objections to recording an entire interview because of security reasons, and I can understand why, but I do not see why there should be such objections to a picture. Not only Roman Catholics but Protestants object.
I have a serious case at the moment involving accusations by a mother who was taken to Castlereagh. She is an old woman of 70, and she was taken to Castlereagh and shown her son sitting in a cell. The police are alleged to have said to her, "You see your son there? Well, he will be there for ever." That is very serious. The way to deal with such a case is to film the people concerned. There may be difficulties for the defence and for security in recording everything that is available, but I do not see why we cannot have a camera record of a suspect—

The Minister of State, Northern Ireland Office (Mr. Michael Mates): Perhaps I can help the hon. Gentleman. That facility has existed for some time. Cameras are monitored independently by uniformed members of the Royal Ulster Constabulary quite separate from the investigation branch in Castlereagh. All the time a suspect is under interrogation he is watched from outside on a closed-circuit video by a uniformed officer of the rank of inspector.

Rev Ian Paisley: I accept that, but is a recording available? Can the Minister answer that? Can a recording be made available to the judge in a court?

Mr. Mates: No, the interviews are not recorded, but the inspector takes a note of when the person for interview goes in and how long he is there and watches him the whole time he is there. That is part of the inspector's daily duty.

Rev. Ian Paisley: I accept what the Minister says, but he has not given me any new information. I must not have put my message across. I am arguing that a recording should be made which can be made available when accusations are made. I can only see that as helping to clear police officers. I know that it is a usual ploy of people brought in for questioning to accuse the police. We all know that. Why cannot we have a recording of the interview without any words being recorded? I am aware of the argument about a full recording of the words. I am talking about seeing the interview afterwards. That is an important point and the Government must face up to it.
We must also make it clear that there is no support in any part of the community for holding people for long periods without trial. That feeling goes across the communities. It is not a pleasant thing to be held in Crumlin Road prison. I have done two stretches there, so I know Crumlin Road prison well. It is unpleasant to be in a cell for 24 hours every day. I do not know whether any men here have been in a cell, but to sit there with the door locked 23 hours a day for perhaps a year or 18 months is unacceptable.
When I visit the prison as the Member of Parliament for my constituency and as the Member of the European Parliament for the whole of Northern Ireland, all the men say, "Get us tried. Get us to court. Then, if we are found guilty, at least we shall have reasonable living conditions."

Living conditions in Crumlin Road prison are not reasonable. The Government must face up to that, and I hope that they will. I know that there are difficulties.
I am glad that there is now proper segregation in the Crumlin Road prison and that we do not have confrontations between various sets of visitors. I hope that that segregation will long continue. The Government may argue tonight that it is not separation or segregation but no longer do Republicans and Loyalists mix. I was talking to a prisoner the other day when I was doing my duty at the prison who said, "I never see a Republican." I said, "Long may it continue." The Republicans say, "I never see a Loyalist." That is the way it ought to be.
I hope that the conditions in Crumlin Road will be brought under careful scrutiny by the Government and that something will be done to ease not only the time that it takes to bring people to trial but the conditions in which they are held while waiting for trial.

Mr. Ken Maginnis: It was most appropriate that Lord Colville prefaced his report by outlining the dilemma that the Government and security services face in the fight against terrorism. Unfortunately, I was once again disappointed at the way in which the hon. Member for Kingston upon Hull, North (Mr. McNamara) trivialised the debate and displayed what at best can be called a degree of naivety in dealing with the difficulties that face the security services in their fight against terrorism. I pay tribute to members of the security services who place themselves between the law-abiding community and those people who would bring murder and mayhem to our community.
I suppose that an example of the difficulties that the security services have was the bombing campaign in Belfast over the Christmas period. Business men and Christmas shoppers were held to ransom by the terrorists, and the imposition of security checks at the level necessary to prevent bombings was also a source of frustration to the community. Inevitably, it led at times to the community being less than sympathetic towards the job that the security services had to undertake.
It is important that sensible decisions are taken more quickly, and before the event. As to the Belfast bombing campaign, my right hon. Friend the Member for Lagan Valley (Mr. Molyneaux) and I had numerous meetings prior to that campaign with the former Secretary of State for Northern Ireland. We told him that our information indicated that vast quantities of explosives were being brought across the frontier from the Irish Republic into west Belfast so that a campaign could be mounted.
We pressed privately and publicly for a couple of extra battalions to be deployed along the frontier, so that a degree of interdiction could occur. That advice was not heeded. We have two extra battalions now and we are glad to see them, but they were not made available in time.
The Government and the Ministry of Defence must give a greater commitment to the task confronting the security services. When reinforcement in the short term or medium term is required it should be available when requested—not after the event. It is important also that our cross-frontier checkpoints are properly manned. I shall refer to them in detail later. While there remains ineffective liaison and co-operation with the Irish Republic, we must look to our own frontier defences.
We are not helped by our own tourist board, which goes out of its way to criticise our frontier checkpoints—describing them as ugly, forbidding and an offputting experience for tourists. That is totally to misunderstand the need for the checkpoints, to proect those who live close to the frontier—as my constituents do—and to intercept arms and explosives coming from the Irish Republic in considerable quantities.
I do not need to remind the House that Libya supplied 150 tonnes of arms and explosives that were imported into the Irish Republic. They were dispersed throughout that jurisdication, and are now brought across as required to enable terrorists to wreak havoc on our community. I suppose that I can expect little else from the Northern Ireland tourist board than criticism of the checkpoints given that it sees the conflict as a curiosity factor that could be positively harnessed to encourage people to visit Northern Ireland. I hope that the Secretary of State and his Ministers will pay more heed to the ordinary people, who for 20 years have withstood the onslaught of terrorism, than to those who sit in ivory towers and who believe that some 5 per cent. of abnormal people should be catered for in the tourist programme. I do not know what the tourist board's ideas do for the 95 per cent. of people who come to Northern Ireland for justifiable reasons.
I am worried because I read today that the Killeen checkpoint may be abandoned. I do not believe that it has been totally effective. For years, members of my party and I have argued that a checkpoint that can be driven around quite easily is ineffective. We have made official representations on that issue but we have not been heard. Instead of making amends for its shortcomings, we have heard the hint—it was perhaps only a fishing exercise to see how we would react—that the Killeen checkpoint may be closed. If that was a fishing exercise, I assure those responsible that we are not prepared to see the frontier opened up, with no checks against the importation of weapons and other illegal goods.
The purpose of permanent vehicle checkpoints needed to be re-examined, because for years and years we have argued that "permanent vehicle checkpoint" is the wrong name for such frontier posts. It suggests the wrong idea. I would prefer to call them permanent patrol bases, because to use them simply to prevent traffic moving backwards and forwards across the frontier is not enough. We must use them as jumping-off points for pre-emptive patrolling. Patrolling cannot take place 10 to 15 miles from the frontier, because that creates a no-man's-land, in which the terrorist dominates and in which he is able to lay land-mines and prepare ambushes. Those areas become more difficult to police.
Lord Colville referred to those actively involved in trying to open up unapproved roads that lie between the various monitored and official routes across the frontier. I am afraid that those people are able to operate because of the ineffective legislation in the Irish Republic. They approach closed roads from the Irish Republic with lorry-loads of stones, earth-moving equipment, diggers and bulldozers and, from there, they are able to reopen the crossings, thus providing more access points for the terrorists who murder and bomb in Northern Ireland.
Does the Secretary of State agree that most of the bombs exploded within 15 to 20 miles of the frontier had

been prepared in the Irish Republic? Again and again the vehicles involved are stolen in Clones, Dundalk or Sligo. Close to the frontier the campaign is directed from the Irish Republic, but the weapons and explosives used in Belfast also come from the Irish Republic, from as far away as Limerick. As Lord Colville says, there is no justification for saying that the closure of minor, or, as we call them, unapproved, roads greatly hinders farmers on both sides of the frontier. It may cause a small amount of difficulty. Lord Colville said that the diversion caused by the closure of Farellys crossing in my constituency was about 3 km.
Between 100 and 125 tonnes of Gaddafi's weaponry is still in the Irish Republic and somebody has to persuade the Government of that jurisdiction to do more to find that weaponry more quickly. In the interim, we must try to implement an effective means of interdiction close to the frontier. It is too late when the explosives wreak havoc in Belfast of Lurgan or other Northern Ireland towns.
The Government must concentrate not just on weapons; they must investigate racketeering. I congratulate Customs and Excise, the police and the Army on their success to date and on the seizure in the past month of thousands of illegally copied videos and pornographic material. That has been a serious blow to the IRA's ability to finance itself. But not enough is being done to ensure that the finances of illegal organisations are cut much more quickly. I know that that is difficult.
Lord Colville says that with the single market there will not be the same rip-off with hydrocarbons, beers and spirits and other such products. But we are worried not just about illegal videos and pornographic material. Illegal substances such as clenbuterol, better known as angel dust, are widely used not just in Ireland but throughout Europe. In Ireland angel dust is profitable. I shall give the House an idea of how profitable it is. A cannister that is "wholesaled" for £40 will be passed on to the farmer for £120. That is a 300 per cent. profit. The farmer will be able to treat 10 animals with that amount of angel dust, and each animal will probably increase in value by between £100 and £150. There will be a profit of between £1,000 and £1,500 from the farmer's £120. Does anyone believe that a business that is more profitable than that of cocaine, so we are told, will be missed by the terrorist? The terrorist controls the market from the rest of Europe into Ireland and from South America into Ireland.
Sadly, I must find fault with the Department of Agriculture. In its desire not to harm the majority of good, decent farmers who are trying to make a living and produce good beef for the consumer, it sweeps the issue under the carpet at an early stage. I went to the Department and I was assured that its checks and balances were such that the use of clenbuterol could not be sustained. I was told that it would be detected but, unfortunately, that has proved not to be so. As a result, the terrorist is making great capital.
The Government fall down, as it were, when it comes to claims against the Royal Ulster Constabulary that are made by those who are taken in for interrogation. On being released, there are claims of ill-treatment, which constitute a real money-spinner. We reached the stage when a firm of solicitors, Madden and Finucane, to which I have referred in the House before, is able to boast on behalf of its clients about the vast sums that it has obtained


in compensation from the Northern Ireland Office without ever having to go to court. Out-of-court settlements are unforgivable.
I am not sure whether the hon. Member for Newry and Mourne was worried about the description—I cannot remember it exactly—of the people of Northern Ireland as
"litigious". In other words, it was said that they were keen to get into court. We saw examples of that for years when actions were brought against the road service authority. There was no obligation on anyone to lift his foot or to look where he was walking. Indeed, the exact opposite was the case. If someone thought that he could find a hole to fall into, he sought it diligently. There were estates where there was not one house in which someone had not been to court claiming damages because of a fall in the street.

Mr. Mallon: Will the hon. Gentleman give way?

Mr. Maginnis: I am sure that the hon. Gentleman will be able to take up the matter in his own speech. I shall not give way because of the time.

Mr. Mallon: On a point of order, Madam Speaker. If the hon. Gentleman feels that it is necessary to refer to me again without giving me the right of reply, perhaps he will at least refer to my constituency correctly.

Madam Speaker: I am sure that the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) is capable of doing that.

Mr. Maginnis: Claims resulting from the state of the road surface dropped dramatically when claimants were forced over the step and into the court to prove their case. Out-of-court settlements are a disaster.
It would be interesting if those claiming ill-treatment by the police were forced into court where they could be cross-examined. We would see some interesting people with some interesting connections in court. It might be a revelation.
One of the most surprising of all claims that were settled out of court was that made by the widow of Daniel Doherty. Daniel Doherty was shot in Londonderry as he approached a hospital there, armed and intent on killing a member of the security services. One fails to understand how his wife could be compensated for his death.
I remind the House of the reply when I asked about the case. I was told:
It is not the practice to publish details of police investigations. The death of Daniel Doherty was fully investigated by the RUC, and the report passed to the Director of Public Prosecutions, who directed 'no prosecution' of the soldiers involved.
However, I believe that it is widely accepted that Daniel Doherty was engaged in terrorist activities when he was killed."—[Official Report, 16 December 1991; Vol. 201, c. 59.]
The irony of that award to Daniel Doherty's widow is that the person who was attacked received no compensation, nor when he died prematurely did his widow. Where is the justice in that? The Secretary of State and his team must give some consideration to that. Justice is as much about ensuring that people who do not deserve do not get as about ensuring that people who do deserve receive what is rightly theirs.
The whole issue of answers in the House must be considered carefully. It is necessary that members of the community and Members of the House should know what

is going on, but again and again when I ask questions I find that the facts about the situation in Northern Ireland are hidden.
Last December, I asked about the award of compensation when terrorists had been shot dead or shot and injured by the security services. I was told:
The available information is set out in the table below. It should be noted that this information, which is based on the date of settlement and not of the incident concerned, does not differentiate between 'terrorist' and 'non-terrorist' incidents". —[Official Report, 12 December 1991; Vol. 200, c. 522.]
How can the House be kept informed when we do not differentiate between terrorists and non-terrorists when it comes to the compensation that is awarded, mostly in out-of-court settlements? 
If there is One issue on which I agree with the hon. Member for Kingston upon Hull, North it is the issue that many of us consider to be the crux of the Northern Ireland security question—but I think that I agree with every hon. Member in the House on that issue. I believe that there must be de facto police primacy in Northern Ireland. It is not enough simply to believe in police primacy; it must work in practice, and so far it has not done so.
I do not intend to go into the Nelson case, as the hon. Member for Kingston upon Hull, North did, or to rely on newspaper reports or television programmes. I followed the trial of Brian Nelson, however, and elements in it deeply disturbed my colleagues and me. Let me say clearly that, although my party wishes to give the security services wholehearted support, we do not intend to try to justify the unjustifiable. If we do that, we shall deliver the security services in their entirety as hostages to fortune: it would be self-defeating as well as morally wrong.
The police know exactly how far they can go within the law—and God knows, at times decisions are difficult; mistakes have been made, and will be made again. They know how far they can go, because it is clearly laid down for them. For that reason, I believe that no aspect of security must be hidden from the police. The new deputy chief constable will have operational responsibility for all aspects of policing, and I look forward to seeing him get to grips with all the available intelligence and information, whether it is made available to the Army, MI5 or the police themselves. Someone will be accountable, and in that way we shall deprive the terrorist of one of his greatest weapons: the insinuation that the security services are involved in illegal activities.
A problem arises when Army units are brought into Northern Ireland for three-month roulement tours. I am not happy even with six-month roulement tours, but I know the difficulty of providing the necessary level of military manpower in Northern Ireland. As has already been mentioned tonight, an unfortunate situation recently developed in Coalisland, in my constituency. Soldiers behaved unwisely, but I do not believe that they were to blame: they had been brought in on a three-month roulement tour, without being given the proper training that should be available to everyone who serves in Northern Ireland.
It would be wise to ensure that, in future, three-month roulement battalions are held at brigade reserve level and are not put on the streets where, without the proper briefing and knowing that they are in difficult areas, they tend to view the entire community as hostile.
That attitude is reciprocated. There are many decent people in Coalisland, but there is a strong IRA element


within the community. We must not give those people the opportunity to exploit our weaknesses. Things have now settled down, and I hope that such an incident will not happen again. My party wholeheartedly supports the security services, but we cannot justify the unjustifiable.
My final point—

Mr. Mallon: Hear, hear.

Mr. Maginnis: Of course, Madam Chairman—

Mr. Mallon: Madam Speaker; get that right at least.

Mr. Maginnis: Yes, Madam Speaker.
I do not doubt that the hon. Member for Newry and Armagh (Mr. Mallon) will be relieved when I stop speaking, but he will have to spend a few minutes trying to avoid the issue of how we effectively deal with terrorism.

Mr. Mallon: Will the hon. Member give way?

Mr. Maginnis: You will hear, Madam Speaker—

Mr. Mallon: Will the hon. Member give way?

Mr. Maginnis: Given what the hon. Member—

Mr. Mallon: Will the hon. Member give way?

Mr. Maginnis: —said from a sedentary position, I think that I am entitled to answer.

Mr. Mallon: Will the hon. Member give way?

Mr. Maginnis: No, I will not.

Mr. Mallon: How can the hon. Gentleman accuse me of refusing to comment if he will not give way?

Mr. Maginnis: We shall hear many platitudes from the hon. Gentleman but little that is designed to help the situation in Northern Ireland or to show some understanding of the position in which our security forces find themselves.
I welcome the news that a commissioner will be given access to the holding centres. That will help to protect the police, who have a difficult job in those centres. I hope that the commissioner's brief will be very carefully thought out and explicitly defined. In the past five or six years, great improvements have been made in monitoring holding centres. More attention is now paid to the way in which notes are validated. That is an improvement compared with 10 or 15 years ago. There are now means of visually overseeing what goes on when suspects are being questioned.
Most sensible people will agree entirely with Lord Colville's decision that video-recordings should not be made. Without the present system of questioning, less intelligence would be given to the security services. Much good work is done in holding centres in a way that protects the person being questioned as well as the questioner. It would not matter what method was used to acquire the video recordings or to try to safeguard their use, there would come a time when a solicitor or barrister would be able to convince the court that it was in the interests of justice to see those recordings, and lives would be put in danger.
I hope that, although the commissioner will have the right to visit unannounced at any time, day or night, he will not have direct access to the room in which suspects

are being questioned. I believe that he will have the right to watch and listen to what is shown on the video. In that way, he will be much more effective. The police will not know that he is there, so their behaviour will at all times have to be circumspect; nor, of course, will the suspect know that the commissioner is there, so he will always have difficulty deciding how and when he should allege ill-treatment. Overall, meticulous care in the way in which the police carry out their duties is important—it is also important for their benefit.
The morale of the community depends on the legislation available to deal with terrorism. Many would think that the legislation is inadequate, but if we had the task, I do not think we could do much better. Legislation must be fair and must be accepted by the vast majority of the community if it is to work. I am concerned that the community does not have confidence in the legislation, and it is the direct responsibility of the Northern Ireland Office to reassure the community.
In 1984–people died as a result of terrorism. In 1990–91, the last year for which I have figures, 82 people died. That is an increase of 90 per cent. since the period just before the Anglo-Irish Agreement was signed. In 1985, 89 per cent. of murders were carried out by Republican terrorists and 11 per cent. by Loyalist terrorists. In 1990 the figure for Republican groups was 71 per cent. and for Loyalist groups it had risen to 29 per cent. Again, I believe that that was due to the lack of morale in the Loyalist community. I hope that the Secretary of State will bear in mind the need to raise the morale of the community through the passing of honest and reliable information to the community and to the House. That is a prerequisite for success against terrorists in the community.

Several Hon. Members: rose—

Madam Speaker: Order. I must inform the House that, unless speeches are curtailed on a voluntary basis, I shall not be able to call all hon. Members who wish to speak.

Mr. Andrew Hunter: A sense of déjà vu descends over relatively seasoned debaters of this issue, and rehearsed arguments are given a further hearing. My position is unequivocal and unambiguous: I deeply lament and regret the circumstances which have led to the measures but, given those circumstances, I regard the measures as absolutely essential and look forward to their being approved tonight.
I wish to be selective and return the debate to Lord Colville's report. In his opening remarks, my right hon. and learned Friend the Secretary of State drew attention to the summary statement on page 2 of Lord Colville's report, which says:
The new Act, and new arrangements in it, seem to have been introduced and have since been operated without any appreciable adverse reaction. I do not recommend the suspension of any of its provisions.
That makes good reading, but some points are worthy of attention and debate.
I was particularly interested in Lord Colville's comments on one of the new sections in the Act, section 30, and the provisions regarding the possession of items intended for terrorist purposes. The origins of that measure lie in Lord Colville's report of 1990 on the emergency provisions legislation. Lord Colville acknowledges that it is early days yet and says that, so far, there


have been no convictions. At the time of his writing, three people were on remand. None the less, he points to that item as being a valuable weapon in the armoury against terrorism and already sees signs of its having a deterrent effect. That is encouraging and we can look forward, next year or whenever we next review the matter, to seeing further evidence of the progress of that part of the measure.
The second subject to which I wish to refer is the obtaining of confessions, to which the hon. Member for Kingston upon Hull, North (Mr. McNamara) referred in his opening comments. Lord Colville's 1992 review seems to show that he is happy with what he has found. He concludes on page 10:
Certainly nothing has happened to throw doubt on the wisdom of having re-enacted section 11 this time last year".
On page 14, he writes:
I cannot accordingly recommend that there is any material which should now lead to a relaxation of the section 11 rule. If anything terrorists are becoming more adept at resisting interrogation".
Notwithstanding Lord Colville's comments, it is right that we still question why there is a divergence with regard to the admissibility in evidence of statements between EPA and the Police and Criminal Evidence Act 1984. I have not yet been reassured that sufficient grounds exist for that divergence. I note that Lord Colville's paper refers to hostile assessments of the situation in Northern Ireland in the light of that section.
Another area of concern is complaints about ill treatment at holding centres—pages 24 to 38 in the report. By any criteria of judgment, the catalogue that Lord Colville describes makes uneasy reading. In his report on the prevention of terrorism legislation in March last year, he spoke of his growing concern about complaints of ill treatment at holding centres. Page 25 of the report says:
I suggest that something needs urgently to be done.
His 11-point description of a typical course of events makes profoundly disturbing reading. Will my hon. Friend the Minister, in summing up the debate, note that we want to eliminate the running sore of disquiet on those matters?
Having said that, I warmly welcome the measures and sincerely hope that they will meet with the approval of the House tonight.

Mr. Seamus Mallon: This is one of the most depressing debates in the House, for the good reason that there is a certain amount of ritual about it. That ritual repeats itself because the problem and its supposed solution keep being repeated ad infinitum.
If we had the honesty to admit reality, it is that there is no solution to be found through this type of legislation. That is not to say that there is not a need for legislation that copes with terrorists. From listening to tonight's debate, one would almost assume that the order will solve the problems. I regret it, but in two, five, 10 or 20 years' time, exactly the same problems will be faced by those dealing with the legislation and exactly the same points and comments will be made, if we do not have the honesty to question the basis of the legislation—that it provides the power to find a solution. I do not believe that that is possible. To stop this ritualistic dance, I ask of us all not to repeat what we have said ad infinitum. That is what we are doing.
The Government, whatever their structure, will defend the legislation with great self-righteousness. They will

score political points over the Opposition. The Opposition, whatever their complexion, will oppose because they are the Opposition. The Northern Ireland Members who are here from all parties will range over various factors, from angel dust, through people getting their big toe broken and a compensation claim, to the human tragedies that face us all. If we do not face up to the facts, that kind of black theatre will continue. Sooner or later, a Member on the Government Benches, whoever the Government are, will have the courage to ask: is this not becoming a ritual, is there not another way, are we not at the end of history and at the beginning of the future, and is there not a way other than continuing as we are doing?
What are we doing? Each time the legislation is debated, the law is diluted further. That is not a political point; it is a fact. We have more troops to guard those who are building the border checkpoints, about which the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) spoke at great length. A British Army brigadier told us publicly that it took one brigade to guard those who were building the look-out post at Annaghmartin. While that was happening, the Irish army was across the border guarding the brigade that was guarding those who were building the checkpoint. I call it black theatre and that example starts to put it into perspective.
We now have more technology on the hillsides and look-out posts that see nothing. We have look-out posts that cannot see when terrorists are sitting in front of them making and planting bombs. Those look-out posts are causing anxiety about possible radiation, but the one thing that they cannot do is see. We have more dubious tactics. Could anyone on this side of the Irish sea have watched the "Panorama" programme without feeling slightly ashamed, embarrassed and squeamish about the allegations? I am not in a position to know whether or not they are true, but I do know that the men who made that programme took more than a year to make it, and they were so thorough in their research that I believe that we should at least look at it seriously.
Of course we shall have more checkpoints of the kind referred to by the hon. Member for Fermanagh and South Tyrone. It is thought good to have these great checkpoints —it keeps people happy. If I happened to live in Britain and if my son were one of the young soldiers blown to bits in one of those static checkpoints, there just to reassure people or keep them happy, I should be a very angry man indeed. Two young men have been blown to bits in my constituency, in a checkpoint which I believe serves no security purpose whatever.
Unless we face reality, and unless some of us start having the courage to question things which we have accepted, or which have been accepted, for so long, we shall have more self-perpetuating failure. It could be the beginning of the future if we had a little bit of courage. If not, we shall come back year after year, for however many years it is, and we shall all be saying the same things.
It is interesting reading the reports in Hansard. One could almost have written in advance most of the speeches that have been made tonight—the reference to angel dust being the honourable exception. In reality, there is nothing more for the Minister to say. He cannot take away from the legislation; he adds a little each time. There is little more that any of us can say. We can only try to ask for a change of thinking on the subject. We must ask ourselves


the fundamental question: is the legislation capable of succeeding and of solving the problem? If it is not, the Government should think again.
I take this opportunity—it may cause me problems—to say to the IRA that it cannot win with this campaign of violence. There can be no military victory for the IRA, and I say to it unequivocally, "Stop now, without any discussion, because what you are doing is wrong." I say to the Government that they cannot win either. There can be no military victory for this Government or for any other Government in circumstances such as this. So I say to the Government, too, "Stop. Think. Reassess the situation and see whether you are going down the wrong road". Is there not another way of proceeding, which will not cost the British taxpayer £2.5 billion a year—money which, by and large, goes down the tubes in a wholly unproductive way—and which will not cost lives, scar the countryside with look-out posts, closed border roads, checkpoints in the hills or whatever? They should ask themselves whether there is another approach to the problem.
It is time that some of us started to tell the IRA and the others involved in the search for a military solution—and that is the Government—that our peace, lives and future happen to be more important that their prejudice or principles. The people of Northern Ireland deserve better than to be locked into military combat between two sides, neither of which can win. It is time that there was some thinking on that. I know that that view will not be accepted readily—of course it will not—but it is time that someone started asking some questions.
Much has been made of the "Panorama" programme, and I shall not labour the point. I merely ask what sort of system it is which, after 20 years and with all the legislation that is in place, must rely on the dubious tactics whose use was alleged on that programme. In a previous renewal debate, the then Secretary of State, the right hon. Member for City of London and Westminster, South (Mr. Brooke), said:
we shall continue to work unreservedly for the defeat of terrorism with all the means at our disposal that are compatible with the letter and spirit of the rule of law." [Official Report, 12 March 1990, Vol. 169, c. 32.]
Would any objective person watching that "Panorama" programme accept that that was compatible in any way with the spirit and letter of the rule of law? I make no judgment about that programme. However, if a reputable programme with the investigative powers of "Panorama" makes so many allegations, it is not doing that without information or with faulty information.
It is clear from the transcript taken in a court of law that Colonel J was, in his own words, in many ways colluding with murder and ignoring it. If that is the case, we had better sit up and end the self-righteousness that is injected into this kind of debate. We should ask ourselves what kind of society is being left for us in the north of Ireland.
Yes, we have our problems. We have enough of them and we do not need any more. We do not need that can of worms every two, three or five years. That is not compatible with the rule of law.
Perhaps the most serious point is the allegation that Colonel J and FRU knew that arms were to be shipped into the north of Ireland from South Africa, but they did not intercept them. Those arms were used to kill the lady

from the chemist's shop, the people in the betting shop on the Ormeau road and God knows how many other people. If that is so—and it must be the Government's responsibility to discover whether it is true—Colonel J should be in the dock to answer for collusion and involvement in murder. As a former Prime Minister once said, "Murder is murder is murder." There cannot be any conditions on it. I hope that the Secretary of State and the Minister of State will take that on board and ensure that we do not have such a legacy in Northern Ireland.
I want to make a few points about the Colville report. Lord Colville is always complimented when he produces his report. I have tried to understand the mind of Lord Colville in his most recent report. Normally his reports are very objective and impartial. As a lawyer, he has been able to deal with the problems from a distance and to assess them.
About 14 pages of Lord Colville's report rubbish the right of a person to make a claim of ill-treatment while in custody. I am not naive enough to think that people do not make spurious claims. However, I believe that there are enough problems to be dealt with in Northern Ireland and there should not be 14 pages of highly partial and pejorative terms like "dubious purposes." The report states:
even unmeritorious claims can bring acquittal or substantial tax-free cash sums, or both, to those who do not deserve it.
That is in regard to court decisions or decisions to settle out of court. Not only does the report pour scorn on those who make claims; it pours scorn on the legal process itself.
The report also states:
The system can so seriously be exploited that it serves as an encouragement to false accusations.
Are we saying, or is Lord Colville implying as some previous speakers have implied, that the people of the north of Ireland do not have any integrity whatever? As a person from the north of Ireland, I resent that.
The final insulting paragraph of the report states:
Considering the allegiance of some of those who exploit the system it is not fanciful to suppose that terrorist organisations take at least part of the damages awarded, so that they are being financed directly at the taxpayers' expense.
The report continues:
That harsh catalogue deserves intricate analysis of which I will attempt to sketch the outlines.
It does not, with respect. It demands proof that that happens. It demands hard facts in at least one case to back it up. Is it there? Lord Colville is a lawyer, someone who has been preparing his report for a number of years. There is not one scrap of evidence—nothing which is not hypothetical. There is nothing to suggest that the points that he makes in the first 14 pages have any great relevance to the problem. That is most disappointing indeed. That brings his position into question. That section of the report certainly seems to be an apologia for the legislation rather than a critical analysis of it. Surely a person who is engaged to do that task must provide evidence if he draws such fundamental conclusions. He has not done so.
Lord Colville then concludes by making three recommendations which disturb me. The first one is that a log of everything be kept so that
the slightest incident is noted lest it should turn into a complaint … by way of pre-empting any later claim of abuse.
That reminds me of a statement by Willie John McBride when he was captain of the British Lions when they went to play New Zealand. His instruction was, "Get


your retaliation in first, lads." The report smacks of that. and that cannot be good for the legislation or the consideration of it.
If we are to advise people to pre-empt any claims of abuse, what will happen to that log? How would one deal with the incident at Coalisland? Have we a log on that, as Lord Colville tells us? If he is right, it surely is written in the log book of some of those soldiers. Then they will tell us why they acted unwisely, as the hon. Member for Fermanagh and South Tyrone said, when they went into a bar, shot three people and destroyed the bar. That is a fact. Perhaps the hon. Gentleman will tell us about that. There was a photograph of the incident in Derry. Was that in a log? If we are not going to be honest about these matters, we will merely conduct a charade, and that must be challenged.
Some of Lord Colville's other points should also be challenged. They are that a number of claims are spurious because they are not backed up by complaints to the Police Complaints Commission. He is implying that, in effect, the way to deal with that is to ensure that anybody who makes a civil claim for compensation should be required to make a formal complaint so that one version may be compared with the other.
A person in my constituency made a complaint to the Police Complaints Commission. He was subsequently charged with an offence by the RUC. His evidence to the Police Complaints Commission was used against him in court by the police. How did the police get that evidence from the Police Complaints Commission? Is that ethical? Is that professionally correct? People would be very concerned if that approach were taken. I shall give the person's name to the Minister of State so that he can inquire into the matter. I have the name, the time and the place. That is something into which Lord Colville should inquire, but he comes out with recommendations that simply do not measure up.
Much was made about checkpoints. I believe that checkpoints are a death trap for those who have to man them. The Minister and the Secretary of State know my views, so I shall not labour them. But at a time when frontier posts are coming down all over Europe, when Europe is beginning to integrate and when other countries are moving away from the history and the problems, we arc building more frontier posts and more edifices on the border. Instead of letting in a breath of fresh air, we are entering the siege mentality that has been shown throughout the debate tonight.
We should examine the ethos of the legislation closely, not least where it refers to terrorist financing. There was a massive operation not so long ago, mainly in my constituency. I am told that it involved 1,000 soldiers and policemen and that it was remarkably successful. I am not sure that any charges have been brought as yet. I do not know whether any charges will be brought. I do not know whether any charges will centre on some people involved in terrorism.
However, ordinary decent people in Newry, south Down and south Armagh were subjected to that operation who have no connection with terrorism. We were worried when it was trumpeted from the Northern Ireland Office in the media that the operation was the final body blow to the IRA in that area. It was not very efficient. I hope that the Minister will take steps to ensure that the next time it is efficient.
One gentleman, whose name I shall give to the Minister, had his house raided. His life insurance policies were taken away. Photocopies of the policies were sent back. That is against the legislation in any case. Photocopied life insurance policies are no use to anyone because they are not accepted. Of course, at the end of the day, it was the wrong man and the wrong house anyhow. But still his life insurance policies have not been returned.
In another case, a highly respected accountant was searched. Even though the warrant identified the files that were to be taken, every other file in not only his house but that of his mother-in-law and his partner was scrutinised. In a third case, a person had his house identified as that belonging to another person of the same name. He was subjected to the same type of approach.
What does that do in a place such as south Armagh? What attitude does it leave among ordinary, decent people? It leaves them with the impression that when it comes to the operation of the legislation, they come a poor third and their position is not given much consideration. I know that the Minister of State thinks that it is funny, but I happen to believe that every individual has a right to respect for his or her position and his or her rights.
If an individual breaks the law, society has the right to subject that person to the rigours of the law through a proper court system. But the longer that legislation such as we are considering tonight remains, the more we postpone the day when we can set about solving the problems and the greater legacy of distrust and lack of confidence in the law the Government will leave in my country. It is time that they started to face up to that.

Mr. Menzies Campbell: Madam Speaker, although for reasons that you will readily understand it seems rather a long time ago, I recall that the elegance of the language used by the Secretary of State in introducing the debate did nothing to conceal the horror of the catalogue of death and destruction of which he spoke. Indeed, if anything, the dispassionate account that he gave underlined the unspeakable nature of the behaviour which he described as a justification for the renewal of the order.
I welcome the Secretary of State's announcement about the appointment of an independent commissioner and an independent assessor. He will understand that we will want to know the terms of the appointments, and the competence that attaches to them.
I welcome the Secretary of State's remarks about his attempts to reduce the time suspects spend on remand. The whole House welcomes the efforts that he will put into that. I hope that the right hon. and learned Gentleman will not close his mind entirely to the possibility of a statutory scheme. Already within the United Kingdom there is one jurisdiction in which a statutory scheme operates with great success, although I do not pretend for one moment that a statutory scheme such as that in Scotland could be brought into existence by the mere passage of a piece of legislation.
If there is a Division, I shall advise my right hon. and hon. Friends to vote for the order. We shall do so not with any great enthusiasm but because we view it as a regrettable necessity. We shall vote for the order with considerable reservations—not least because it is our


profound belief that the rights, protections, and civil liberties of all United Kingdom citizens should be the same wherever they live.
Only in the most unusual circumstances can there be any justification for departing from those principles. It is my sad conclusion again this year that such circumstances still obtain in Northern Ireland and justify renewal of the order. That circumstances exist to justify such draconian powers as those that it contains must be a matter of profound regret to us all.
We must not maintain those powers for an instant longer than necessary. We should tolerate them grudgingly, and work to withdraw them at the earliest possible date. Such powers should never be embraced enthusiastically, for they represent a serious incursion into the rights which citizens of the United Kingdom are entitled to expect, and which we look for in all civilised systems of government.
Why do I believe that the powers are justified and that the order should be renewed? It can only be because the cancer of terrorism still stands at the heart of life in Northern Ireland. It can only be because I believe that the powers provide a means of containing that cancer. It is my profound belief that we delude ourselves if we think that more and more stringent powers, or even the more stringent exercise of powers already available, will bring peace and tranquillity to the Province.
So long as the legislation is seen to be strictly necessary, it will be acceptable to the people of Northern Ireland, but if abuses occur or if the powers are too wide the legislation will become counter-productive and public confidence will be dissipated.
I listened with interest to the hon. Member for Kingston upon Hull, North (Mr. McNamara). I am sorry that he is not in his place, although he has been present throughout the debate. I hope that I do not do him an injustice, but I understood the hon. Gentleman to say that if there is a Division he and his party will be unable to vote for the continuance of the order—I see that the hon. Gentleman has returned to his place—because of their resistance to the power of internment.
I did not understand the hon. Gentleman to challenge the necessity for the other powers in the order. I share his repugnance for the existence of the power of internment, but not his conclusion. If circumstances justify the existence of the other powers, is it adequate to deny those powers to the security forces because of the existence of a power that is not being exercised? That is a question of judgment, but if the hon. Gentleman does not challenge the need for the order's powers, save for that of internment, surely he ought to consider carefully whether he is not dealing the security forces a hand that they will find extremely difficult to play.
There are some who argue for the use of the internment power—curiously, the debate has been notable for an absence of reference to that—and I do not doubt the sincerity of their belief, but I am equally sincere in my belief that its use would be counter-productive. Its use would result in the alienation of communities and create an atmosphere of desperation. It would be a signal of impotence in the face of terrorism.
When the Diplock courts were established on the recommendation of Lord Diplock, I cannot imagine that

they were ever seen as more than a short-term measure. Is it not time to reconsider whether trial by jury should be available in Northern Ireland, as in other parts of the kingdom, unless it can be shown that good cause exists for not allowing that right? Should not the onus rest on the prosecution in Northern Ireland to show good cause why a man or woman should not have his or her guilt or innocence determined by a jury?
I understand the security implications of video taping the interviewing of suspects. I am disappointed, however, that the Government do not show a willingness at least to experiment to see if such recordings could not be made without prejudice to the interests of state or security. Surely such recordings would reduce the scope for the denial of confessions subsequently or for unfounded attacks on police methods. Their use might have consequences in terms of combating more easily false claims made against the police. I hope that the Government will keep an open mind on this, because in my judgment the video recording of what transpires between police and suspect would be more likely—it is a question of balance—to serve the interests of justice than the fact that such recording is not available now.
I can say as much from my professional experience as from anything else that it is the nature of the transaction between the suspect and the police which frequently allows someone accused of a crime a peg upon which to hang a defence which would not otherwise be available. I hope that what has been said about the video recording of such interviews will be seriously considered by the Government.
One does not use the word conversion easily in respect of the hon. Member for Antrim, North (Rev. Ian Paisley) lest it be thought to imply anything other than the stern Calvinism or Protestantism of which he is a robust proponent. However, his conversion to the idea that the use of such recordings should be considered reflects a great change of opinion on his part. I hope that I do not do the hon. Gentleman an injustice, and I hope that the Government will keep an open mind on the topic.
The order offers no long-term solution. The best hope for that lies in the talks that the Secretary of State has instituted. It is right and proper that they should not form any part of our discussions tonight. I am not party to those talks, but those engaged in them should understand that the people of the United Kingdom earnestly hope for a successful outcome. They are too worldly and too used to violence in Northern Ireland to believe that a solution is likely to be at hand immediately, but those engaged in the talks should calculate how much good will would result from progress in those talks. They should consider the extent to which the sustained progress and political stability created by such a successful outcome might make orders such as the one that we are debating superfluous. It is too much to hope that we are debating such an order for the last time, but is it too much to hope that that day will not for ever be postponed?

Mr. David Trimble: The hon. and learned Member for Fife, North-East (Mr. Campbell) effectively criticised the Labour party's attitude to the legislation. I hope that that that criticism will be taken to heart by Labour Members if the House divides, although I hope that it will not. The hon. and learned Gentleman also said that the legislation makes serious incursions into the rights of


citizens. I had difficulty following him on that point because, bearing in mind the fact that the internment power is not operational. no provision in the Northern Ireland (Emergency Provisions) Act 1991 in any way conflicts with the European convention on human rights. Therefore, that Act is not a serious incursion into the rights of citizens. Comments could be made about the detention powers in the prevention of terrorism Act, but that is another matter.
My hon. Friend the Member for Fermanagh and South Tyrone (Mr. Maginnis) welcomed the Secretary of State's announcement about the introduction of an independent commissioner for police centres. I also welcomed his comment about remand prisoners. I am glad to know that there will be target time for bringing people forward for arraignment to reduce remand periods. I understand the reluctance immediately to adopt a statutory scheme, such as the one in Scotland, but I hope that, when the informal targets have been reached, we can move to a statutory scheme, because failure to achieve sensible progression could lead to a deterioration of the position. Such a statutory scheme would ensure that there is no subsequent backsliding.
Much of the debate has turned on Lord Colville's report. Like other hon. Members, I congratulate Lord Colville not only on that report but on his series of reports over the years. They are well worth reading. My one regret about them is that they do not seem to receive the circulation and study that they deserve. People who are worried about the legislation will find that Lord Colville checks matters such as applications for extension of periods in detention and looks extensively at individual cases. That is a considerable reassurance.
I should like to deal with a few other issues in Lord Colville's report. He says that the current difficulties about definition arise from the difference in statistics emanating from the Lord Chancellor's office and the Northern Ireland Office and suggests that that conflict should be resolved. Perhaps the Minister will outline the arguments on definition and say why we cannot have reliable statistics. Such statistics are important. How else can one measure the effectiveness of legislation? 
In the previous Parliament, I tabled a question about how often those convicted of murder were actual trigger men for people who placed bombs. I was informed that it was not possible to answer that, because statistics were not available. That is quite incredible. Without such statistics, how can we measure the effectiveness of the security forces and the legal system? 
I regret to say that I have the impression that the number of trigger men who are convicted of murder in any one year could probably be counted on the fingers of one hand. If figures were available, they would demonstrate that the system is not as effective as it should be. I fear that such figures as are available give a somewhat false impression.
On the fifth page of the report, Lord Colville discusses the legislation that is designed to deal with terrorist funds. He refers to the position on the Channel islands and on the Isle of Man. He notes that power is available to extend part of the emergency provisions legislation to the islands. He then states:
Whatever may be said about the efficacy of section 13 and schedule 4 to the Prevention of Terrorism Act, it must be of direct concern that the fullest possible range of facilities

should be to hand for the authorities in those jurisdictions to give such assistance as they can to expose terrorists' off-shore accounts and money laundering.
Two issues arise from that passage. The Prevention of Terrorism Act provisions that operate on some of the islands are much narrower than those in the emergency provisions legislation. Part VII of the EPA deals with the confiscation of the proceeds of terrorists' illegal activities. I think that it is fair to say that the PTA provisions on terrorist funds—the Minister's comments will be interesting—are virtually useless. The EPA provisions may be useful, but the PTA provisions are not. That underlines the need for uniform legislation throughout the British Isles, but excluding the Republic of Ireland.
In the same passage of his report, Lord Colville refers to protection payments and tax. Unfortunately, his comment is wrong. I have personal experience of persons who reported that they were being intimidated by terrorists and were making protection payments. They found that, as a result of taking up the invitation of the previous Secretary of State to report these matters, they were raided by the Inland Revenue, and found themselves in a much worse situation. Lord Colville states that he is not aware of such cases, but unfortunately they exist. His comment is no response to the position of those citizens, who behaved, perhaps at a later date, in a responsible manner.
That brings me to the section of Lord Colville's report which refers to cases of irresponsibility on the part of the television medium. At paragraphs 4.2.9. and 10 he refers to a case that went to court in 1991. The defendant was a man called Gilgunn. A complaint was made by the detainee's mother on his behalf to the Anglo-Irish secretariat alleging serious threats made to him by the police. In the witness box, however, the detainee made no attempt to substantiate the allegation. The judge in the case said:
I am satisfied that there is no truth in any suggestion that any threat of this kind was made at any time. I have said previously that Gilgunn was an intelligent young man. He is also, I am satisfied, a manipulative young man.
Lord Colville continues:
In the recent Channel 4 documentary programme 'Behind the Walls of Castlereagh', Mr. Gilgunn repeated these allegations. I heard no reference to the comments made by the judge.
The inescapable conclusion is that Gilgunn manufactured the complaint in an attempt to discredit the RUC and that Channel 4 was too gullible. It is not the only time that there has been such gullibility. I recall the notorious "Despatches" programme which alleged the existence of a so-called inner circle in which it was said that police and loyalist terrorists plotted assassinations. What was produced on screen in the way of evidence was singularly unconvincing.
After the programme, in an attempt to bolster their case, those involved in the production of "Despatches" supplied the RUC with names, some of whom they said were members of the inner circle. Some of the names were not even in the RUC, although those involved with "Despatches" said they were. I believe that the RUC is satisfied that none of those named was so involved.
If the programme makers had consulted any reputable journalist operating in Ulster, they would have been told that the allegations were fantasies. Indeed, some journalists working in Northern Ireland are now reluctant to have any dealings with Channel 4 programmers as a result. I understand that the programme cost about £250,000, which is something worth considering.
I suspect that the programme involved more than gullibility. The person who made it was no wide-eyed innocent coming to Ulster for the first time. He was a native of Ulster who in his student days was associated with extreme Republican politics.
If the police succeed in their attempts to compel "Despatches" to disclose its sources, I think that it will be found that essentially that programme had one source—a person who is known to have a Republican political background. We shall then see that the programme was tainted from the outset. The sinister aspect of the programme was that, in addition to smearing the police, it effectively identified members of a mythical inner circle and so targeted individuals in the Loyalist community. That is a dangerous consequence of irresponsibility.
That naturally leads one to the programme earlier this week and the case of Mr. Nelson. Like other hon. Members, I shall suspend judgment on that until we know more of the facts. It illustrates what we do know from what has come out through the courts and elsewhere and underlines the danger of competing organisations in intelligence matters and the danger of not having proper co-ordination and effective control.
I am not drawing any conclusions about what may have happened. It is clear from what we know that Mr. Nelson was or may have been a double agent. It is unwise to conclude that all his actions were controlled by his intelligence handlers, but there is sufficient in the public domain of a reputable nature to show that there is cause for concern.
I appreciate the difficulties of inquiries into intelligence matters, but I should like to be reassured that there will be an investigation into those matters and that as much as possible will be put into the public domain so that we can see where the truth lies. However, as I say, I caution against taking what emanates from Mr. Nelson as gospel because it comes from a tainted source.
The hon. Member for Newry and Armagh (Mr. Mallon) said that the "Panorama" programme, which I am afraid that I did not see, alleged collusion in the importation of arms. If I remember correctly, all the arms that were being imported for the UDA on the occasion to which the hon. Gentleman refers were seized and the majority of the arms destined for the UVF were also found.

Mr. Mallon: Those arms were imported by a group known then as Ulster Resistance. Some of them were handed over to the UDA and some to the UVF. A consignment was seized by the police outside Tandragee and the rest have not been recovered. It has been established that the gun which killed the people in the betting shop was imported in that shipment.

Mr. Trimble: I am aware of that fact. The facts are, as I stated, that all the weapons in that shipment going to the UDA were found. The majority of those going to the UVF were found. It is said that there were some going to another organisation which have not been found. If, as the hon. Gentleman says, the gun used in that terrible attack was found, it could well be from the UVF contingent.
The significance of the situation is that Mr. Nelson was said to be working for the UDA, and all the weapons destined for the UDA were seized by the RUC. I think that there is no dispute about that.
The hon. Gentleman referred critically to a long passage in Lord Colville's report about complaints against the police. At this stage, I shall simply urge hon. Members to read everything that Lord Colville says on that point. He makes a number of cogent points analysing the way in which the system is not working effectively. There is a serious problem here, because of the way in which the civil legal system is being used to give a false impression.
The actions of the authorities on that point—particularly the Northern Ireland Office—are reprehensible. It is wrong to settle those cases. They should be contested unless it is clear that there is wrongdoing by the soldiers and policemen concerned, in which case, by all means settle. But, as I understand it, Lord Colville points out that cases are being settled because the material to defend them is not available. His suggestions are directed towards ensuring that evidence is preserved.
It is wrong to criticise the suggestion that detailed records should be kept when they are kept, for example, on interrogation and patrolling. Anyone who reads the passage concerned will note that Lord Colville makes some cogent points, which probably provide uncomfortable reading for the Northern Ireland Office: they require a positive response and certain changes.
The current IRA bombing campaign has, of course, caused great concern, which has increased significantly over the past year. My own constituency has suffered the effects of three large bombs. One, containing 1,200 lb of home-made explosive, was defused at Banbridge; another, containing over 2,000 lb of HME, destroyed Craigavon RUC station, wrecked a nearby Catholic school and damaged a Catholic church, various community services and hundreds of houses. The third, containing over 1,000 lb of HME, tore the commercial heart out of Lurgan, a town in my constituency.
Following the bombing of the Baltic exchange in London, people in England may have some idea of the effect of such large bombs. The bomb in the City, however, affected modern buildings, and most of the damage—although it was bad at the time—was essentially superficial: the structures remained intact, and the damage can be repaired relatively easily. In Lurgan, two entire blocks with over a dozen different buildings suffered severe structural damage. I do not want to labour the point, but I think it fair to say that immediately afterwards—and, indeed, today—the town resembled scenes from the blitz.
The bombs did not come from nowhere. A large home-made explosive bomb takes time to prepare: fertiliser must be ground up, other ingredients must be bought and mixed in, and the thing must eventually be assembled and primed. Grinding up the fertiliser for a large bomb requires several days' work, which must be done in places where there is apparent freedom from detection or interruption.
I believe that the bombs that went off in my constituency were made up in the IRA safe havens along the south Armagh and Monaghan frontier; I am not sure which side was involved, but that was where they originated. They were not, however, moved up along the length of Armagh, where they might have been intercepted by vehicle checkpoints. It is believed that they were taken


up through the salient in the Irish Republic created by County Monaghan, crossed the frontier into east Tyrone and then moved into north Armagh.
The police in my constituency may sometimes suspect that a bomb is in transit. They then face the impossible task of covering all the likely targets. That, of course, cannot be done; judgment must be exercised, and the defence of some targets prioritised. It is then child's play for the IRA to see which way the police have gone, and to go the other way and hit a target that has apparently been left open. Many believe that that happened in Lurgan. After the event, the hon. Member for Peterborough (Dr. Mawhinney) mentioned a last-minute reconnaissance car going through the town, and that lends support to their belief.
If that happened, however, I think that it would be wrong to blame the police. As I have said, theirs is an impossible task. The question that should be asked is, why are they given that task? The obvious response must be to go to the source of the bombs, and cut off the movement at that point rather than trying to catch the bombers when they come in. That must focus attention on the frontier areas—not to keep people happy, but to keep people alive and our towns intact.
At this point, we come up against what I regard as a fundamental flaw in the Government's policy: a flaw that has vitiated policy for over a decade, and will continue in the future to render of no avail the sacrifices of soldiers and policemen. The Government believe that they must at all costs have the co-operation of the Irish Republic on the frontier. They have some co-operation, but the truth is that they do not and will not have effective co-operation; effective, in the words of the previous Secretary of State —the right hon. Member for City of London and Westminster, South (Mr. Brooke), who I am glad to see is present—to end the use of the border as a resource for terrorism.
I think that a little quiet reflection on the nature and objectives of the Catholic Irish nation will make it clear why that degree of co-operation will not be forthcoming. The necessary job can be done by our British security forces. It will be done when the necessary reassessment of policy has been made. The legislation that we are renewing contains almost all the legal tools necessary for the job. All we need is for Ministers to have the wit and the will to use them well.

Mr. Jim Marshall: I hope not to make the same kind of personal intervention in this debate as I made in the last debate of the previous Session, when the sitting had to be suspended because I was taken ill and had to be examined.

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Jeremy Hanley): The hon. Gentleman is worth waiting for.

Mr. Marshall: I am always worth waiting for: that is why the House has been waiting so long.
I thank the hon. Member for Upper Bann (Mr. Trimble) for being brief. I know that he wanted to make more points if time had been available. I thank him for leaving enough time for the Minister of State and me to reply to the debate.
I should like to reinforce one of the points that the hon. Member for Upper Bann made. He claimed that Lord Colville's conclusion in paragraph 2.1.5 is incorrect. The paragraph refers to anecdotal stories of employers co-operating with the authorities, who would then attract the attention of the Inland Revenue and Customs. Lord Colville says, quite clearly and categorically, that there is no factual basis for that fear. What the hon. Member told the House a few moments ago is completely contrary to that conclusion, so I should like to hear the Government's view.
It feels as though we started the debate a long time ago. I regret that the Secretary of State is not here—that is not a criticism—as I wanted to thank him for taking us so clearly and succinctly through the order, and for the overview he gave of the security situation in the Province in the past 12 months.
If I had been Secretary of State, I would have felt some trepidation, because this must be the first occasion in recent years when the Secretary of State had his two immediate predecessors hovering in the shadows. I should like to think that they were here to give him moral support. I am sure they were, but perhaps they were here also to ensure that he stayed on the straight and narrow and trod the path that was so well laid out by them.
It was a delight to me, and I am sure to the House, to see the right hon. Member for City of London and Westminster, South (Mr. Brooke) acting as Parliamentary Private Secretary, conveying information from the Box to the Minister of State. I hope that he does not intend again to seek a ministerial career, which he gave up recently.
The Secretary of State went through the customary practice of congratulating Lord Colville on the review. Perhaps I may enter a counter-view. There is a growing view in the Province—clearly not a majority view—that perhaps Lord Colville has passed his sell-by-date. It is felt that, regrettably, he has not introduced the reforms that were suggested in previous reports. We certainly regret that he feels that there is no point in advocating changes that the Government have already rejected. That relates to a point made by a number of hon. Members—in previous years, Lord Colville has argued for televised recordings which were refused by the Government, and it is unfortunate that he has not reiterated that suggestion.
We welcome the Secretary of State's words about the close and growing co-operation between the security forces north and south of the border. The co-operation shows an increasing willingness and desire by the United Kingdom and the Irish Governments to ensure that terrorism does not succeed, and co-operation will increase in order to bring about that state of affairs.
We also welcome the time limits set for prisoners on remand. I realise that it is on a non-statutory basis at the moment, and although we welcome it, it should not be too long before the system is placed on a statutory basis.
We agree that it is essential to pursue social and economic policies to enhance the lives of all the citizens of Northern Ireland. I only wish that the Secretary of State had the necessary freedom to introduce policies that would increase the living standard for the people there, but I strongly suspect that the curbs on public expenditure that are likely to take place in Great Britain will also impinge on citizens in Northern Ireland. Instead of an improvement in living standards, there will be a standstill.
We share the Secretary of State's view that there is a need for a political settlement in the Province. Despite all


that has been said, until there is a clear political settlement which is seen to be fair to all the citizens of the Province, the good will shown by the Governments and politicians from both sides of the divide will come to naught. There must be a political settlement which is seen to be fair and non-discriminatory and one in which all citizens of the Province feel that they are equal in a social, political and economic sense.

Mr. Barry Porter: Will the hon. Gentleman give way?

Mr. Marshall: No, I will not. The hon. Gentleman came in at 10.45 pm and has missed a great deal of the debate.

Mr. Porter: I came in at 10.40 pm.

Mr. Marshall: I apologise. I tend to exaggerate occasionally, but I am sure the hon. Gentleman will agree that it would be unfair to give way to him, as that would take time from the Minister.
The hon. Member for Antrim, North (Rev. Ian Paisley) gave us his usual views, and I am sure that the House was grateful to receive them yet again. He referred to a certain gentleman, whose name I forget, not knowing what was going on behind closed doors at Stormont. He tantalisingly hinted that he knew, and I thought for one moment that he was going to share his knowledge with the House so that not only he and Ministers but all hon. Members could share his knowledge of any progress being made in Stormont. I was extremely disappointed that the hon. Member for Antrim, North, who is usually loquacious, did not go on to give us that information.
I do not often agree with the hon. Member for Antrim, North, although we disagree in a gentlemanly way. However, I agree with two points that he made, and I certainly agreed when he said that it should be made clear to the terrorists and their apologists that they cannot bomb and murder their way to the conference table. He certainly has the Labour party's support on that, and I would guess that he has that of every right hon. and hon. Member.
I also agree with the hon. Member for Antrim, North —he shares the view of the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis)—that there should be a visual record at the Castlereagh holding centre to assist the police and to help to refute allegations made against them. That alone will make it easier for the authorities to refute allegations and prevent people of violence from being able to use those allegations to undermine public confidence in the security forces.
When the hon. Member for Fermanagh and South Tyrone talks about the need to curb racketeering and close off funds to terrorists, he has the House's full support. In speaking of the need for police primacy, not just in theory but in practice, he again echoes a view repeatedly expressed by the Opposition. My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) has occasionally been unfairly criticised for persisting in putting that view.
The hon. Member for Basingstoke (Mr. Hunter) said that Lord Colville had drawn attention to complaints about ill treatment at holding centres. He then said that the disquiet arising from those matters needed to be eliminated. If that is the hon. Gentleman's view, why did

not he suggest the next logical step: to introduce recording equipment into those centres so that there would be a visual record to help in refuting most of those allegations? I was a little disappointed that the hon. Gentleman picked up a point made by Lord Colville but did not then take the next logical step.
In a succinct—perhaps a euphemism for brief—speech, the hon. and learned Member for Fife, North-East (Mr. Campbell) asserted that the reintroduction of internment would be counter-productive. We agree that it would be a recruiting sergeant for terrorists in the Province. He then asked why the Labour party was voting against the renewal order this evening. There is not time adequately to answer that question now—[Laughter.] If those hon. Members who laugh at that assertion read in detail the Second Reading debate last year, they will see all the constructive criticisms that we made about the legislation in Committee, on Report and on Third Reading. They will then realise that we had sound and valid reasons for opposing it, and the necessary changes have still not been made to it.
I shall name but two of our objections to the legislation: first, the question of internment remaining on the statute book; and, secondly, the power to seize documents—a matter that is even dearer to the hon. and learned Member for Fife, North-East. If the hon. and learned Gentleman reads those debates—

Mr. Menzies Campbell: I shall make a point of doing so.

Mr. Marshall: I am delighted that the hon. and learned Gentleman will find time. I just wish that Conservative Members would avail themselves of the same opportunity.
In the few minutes remaining to me, I shall make one general political point. The debate has shown that, although we may hold differing views on the efficacy of the emergency provisions legislation, all Members and parties are united in our determination that terrorism will not succeed. Political change must be brought about through the democratic process, not by the power to bomb and murder. No one can bomb their way to the conference table.
We all recognise the difficult and dangerous work undertaken by the RUC and the security forces. On behalf of my party, I pay tribute to them for their bravery and steadfastness. We must never forget that, in the battle against terrorism, the security forces are there to protect citizens' lives, not to place them at risk; to protect individual freedom, not to undermine it; and to uphold the rule of law, not subvert it. There is no doubt in my mind that in most instances those high ideals are upheld, but when they are not, the consequences provide succour to the terrorists and make the job of the security forces that much more difficult. It is in all our interests that, in the defeat of terrorism, no corners are cut and no laws deliberately broken.
Finally, let me make our position absolutely clear: we intend to force a Division on the order, and I urge support from all quarters of the House.

The Minister of State, Northern Ireland Office (Mr. Michael Mates): I warmly endorse the penultimate words of the hon. Member for Leicester, South (Mr. Marshall). We entirely agree with everything that he said about the necessity for the forces to act honestly within the law and


evenhandedly. I congratulate him on, for the large part, a moderate and sensible speech. I hope that my saying so from here will not damage his credibility, but we find little to quarrel with in most of what he said. The hon. Gentleman has a problem and he was honest enough to say that he did not intend to explain to us tonight what it was. That is why he is urging his colleagues not to support the order.
The hon. Member for Kingston upon Hull, North (Mr. McNamara) started down that road, using a slightly different tack from usual—but then he has been known to change his fig leaf from time to time. Although he produced a different fig leaf this time, that is to say that he could not support the order because inherent in it remained powers of detainment—not an argument that has been in the forefront of his reasons for opposing the measure in the past—the order does nothing of the sort. The power of detention, or internment as he called it, is not dealt with in the order and could not be brought into force without our coming to the House for an affirmative order. Therefore, that reason is even less valid than usual.
In looking to what I hope is mainstream thinking that would command support in both Houses, one can do no better than quote the words of Lord Mason in the last debate in the other place. He spoke for many people when he said:
Unfortunately the circumstances are such within the United Kingdom that some liberty must be sacrificed in the defence of liberty, insidious though that may be. It is the price that must be paid in defence of our democracy … Nothing gives the IRA more joy and some encouragement than to see a divided House, and especially the image created by some within Parliament of seeming to be too protective of the terrorists and their political allies, rather than wishing their destruction."—[0fficial Report, House of Lords, 13 February 1989; Vol. 504, c. 33-4.]
That used to be the words of the mainstream Labour party and I long for the day when it is so again.
Tonight's debate has enabled the House to examine once again the requirement for, and the scope of, the emergency powers now in effect in Northern Ireland.

Mr. Winnick: I listened with care to the Minister's quotation from Lord Mason, who has a point of view, even if it is not one shared by us. The Minister gave the impression, at least, that the Opposition display some softness towards terrorism. He will know of our loathing and hatred for terrorists on both sides of the sectarian divide, not least for the Provisional IRA, whose members have for 22 years committed the worst type of crime, as I said in my intervention in the speech by the Secretary of State. Will the Minister therefore reconsider and recognise that, although there are genuine differences of opinion, there is no difference of opinion in the House when it comes to condemning the crimes and atrocities that have been perpetrated, some of which have occurred in the past six months?

Mr. Mates: I acknowledge unreservedly that that is the view of the hon. Gentleman, and I have never questioned that. But some Labour Members entertain these people —they have brought them over to the mainland and into this House. For as long as that happens, it will be perfectly reasonable to point it out.
I welcome the scrutiny that we have given the measure tonight. It is entirely right, in a parliamentary democracy such as ours, that there should be full and open debate on the need for exceptional powers such as these. In that

regard, I must say that I do not share the view expressed by the hon. Member for Newry and Armagh (Mr. Mallon) that our annual debates are no more than a ritual. It is because we examine the legislation every year, because changes are made in the light of experience and because we continue to draw on the independent advice of people such as Lord Colville that they are not a ritual but a real event, and I am glad that they take place—inconvenient though that may be for some of us.
The Government's aim is a full return to normality and the eradication of terrorism in Northern Ireland. That is our first priority. Terrorist organisations are criminal conspiracies, representing perhaps the most dangerous threat to the fabric of any democratic society. We are determined that they will not prevail. Violence in pursuit of political ends is neither acceptable nor inevitable and for so long as it continues terrorism will be met with a firm, resolute and proactive response.
Within that basic approach, however, it is open to the Government—indeed, it is incumbent on them—to introduce specific measures and powers, where the ordinary law is insufficient, to enable the police and Army to deal with the particular difficulties that they encounter in protecting society from terrorism and apprehending the perpetrators of it. The Northern Ireland (Emergency Provisions) Act 1991 and the relevant sections of the Prevention of Terrorism (Temporary Provisions) Act 1989 also being renewed by the order do precisely that.
We have had a wide-ranging and interesting debate, and I shall be dealing with some of the points raised by hon. Members in such time as I have. Before I do so, however, it may be worth illustrating the practical application of the emergency provisions Act measures by examining one particular case—the refurbishment of a number of permanent vehicle checkpoints. The hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) made some valuable points based on his considerable experience of these matters, and I promise him that I will consider them carefully.
The permanent vehicle checkpoints in border areas provide protection for communities particularly vulnerable to terrorist attack. They deter terrorists by controlling cross-border traffic. They block key escape routes used by terrorists and they provide bases for security force patrols working in dangerous areas.
Following a thorough review, 10 permanent vehicle checkpoints in Fermanagh and Londonderry are being refurbished and improved. In some cases, they are being moved a short distance to more operationally suitable sites. The upgrading programme, which began in south-east Fermanagh, is designed to reduce inconvenience to local communities by improving traffic handling arrangements as well as to provide better protection and improved accommodation for security force personnel at the bases.
The entire exercise provides an example of how powers provided for in one part of the Act can be used to ameliorate the impact of the operation of others of its powers. We recognise the disruption caused to local people by the necessary use at the checkpoints of the powers to stop and question people for so long as is necessary to ascertain their identities, movements and any knowledge that they may have of recent terrorist incidents, and to search vehicles under sections 23 and 26 of the Act.
Part of the refurbishment programme is intended to reduce or remove the lengthy traffic queues that can build


up by redesigning or resiting the PVCPs, providing space for controlled bypasses and lay-bys where inquiries and searches can, where necessary, be made without delaying other traffic. The necessary land is, in a number of cases, being acquired using powers contained in section 24 of the Act, and compensation is being paid under section 63. Work is still in progress, but I understand that the new arrangements for the finished checkpoints have proved much more acceptable to local communities. The repositioning of some checkpoints may also allow the reopening of one or two minor roads in the south Fermanagh area. The Irish security forces have been providing necessary security for the operation on their side of the border and their assistance has been greatly appreciated.
I turn now briefly, I am afraid, to some of the points that have been made during the debate. Reference has been made to videotape recording. Of course we acknowledge that there is genuine concern about the interview procedures. I know that that is a difficult subject and I have made it my business early in my new incarnation to go to Castlereagh. I have been right round the course that a detained person goes round and I have seen every aspect that that person goes through. I have also seen the controls and checks intended to ensure that there is no ill-treatment.
There is provision for medical inspection as soon as the detained person arrives and for a log to be opened to show where that person is at every moment of the day and night. Every time the person is taken out of the cell, even to go to the lavatory, and is returned to it, that is recorded. Whenever that person is taken to an interview room, that is recorded by someone who is not involved in the investigation. That is an imporant safeguard. The people who carry out that part of the handling of a detained person are uniformed members of the RUC. All the time that someone is being interviewed in an interview room, that is monitored by a uniformed police inspector who is not part of the investigation team.
The hon. Member for Antrim, North (Rev. Ian Paisley) wanted to know whether we could go even further than that and provide a record. We have obviously considered that. However, there are difficulties which do not simply relate to the difficulties in obtaining a confession. It is important that people should understand that.
There are difficulties in that some people who belong to terrorist organisations will have their lives and the lives of their families put at risk if they so much as talk to the authorities. That is why many of them adopt a policy of silence to start with. That is visible to the inspecting officer and to the inspector who is present. If a recording of the tape became available even showing that the detained person had opened his or her mouth—never mind whether to make a confession—perhaps just to ask the time of day, there are fears that that person, his friends or relations could be in danger from the terrorists who would suspect—

Mr. Rupert Allason: rose—

Mr. McNamara: rose—

Mr. Mates: I am sorry, I will not give way as I have only a very short time left. I am trying to reply to the debate.
That is why the Chief Constable and those who advise us have concluded that it would not be right to move further at the moment. However, I happily give the undertaking that we will continue to monitor the situation. We do not want those who are detained to be able to sue us afterwards. That makes no sense. However, so long as there are real dangers and when life might be at stake, we must take the cautious view.
The hon. Members for Kingston upon Hull, North and for Antrim, North referred to out-of-court settlements. Lord Colville makes it clear that many of those actions cover a portmanteau of complaints and that in those that include an allegation of assault that claim is very often not substantiated or pursued. The police authority is now analysing civil action settlements to determine in how many cases the settlement relates to a claim of assault and in how many to some procedural error. The results of that study will be made public.
The House may be interested in one example cited by Lord Colville. The plaintiff alleged false imprisonment, wrongful arrest and assault. The police contested the claim, and the assault claim was not accepted by the court, but compensation was paid for overholding—that is, for holding him for too long. The plaintiff was delayed for 45 minutes while a doctor was called to make a final medical examination. Those are some of the problems that we are up against in settling out of court, and they have nothing to do with ill-treatment.
The hon. Member for Antrim, North complained about Crumlin Road and delays on remand. I hope that he is as pleased as others have been with the announcement that we really are seeking to tackle the problem by administrative means, and I repeat my right hon. and learned Friend's assurance that we will not be satisfied with a year's limit if we can bring it down further.
As to the conditions in Crumlin Road, I have visited that prison myself, although I did so voluntarily and not as a guest of the governor. There are some difficult accommodation problems there. It is an old Victorian prison in the middle of the city. The governor, the staff and the prison department in the Northern Ireland Office are making herculean attempts to put that right, but it is inevitably a fairly slow process.
Mention was made by several hon. Members of the independent assessor. His terms of reference will be published when they reach fruition. Of course, that information will be given to the House at the appropriate time.
Legislation, no matter how well-focused and appropriate, is effective only when it is properly enforced. I am pleased to report to the House that the vigorous and impartial actions of the police and Army are bringing real results. The level of security force activity is very high. In addition to the numerous patrols mounted by the RUC, the Army currently undertakes 250 to 300 patrols per day, day in and day out in the Province. For that it should be thanked. That very high figure should be put into perspective when the inevitable but fortunately rare occurrence of improper action by the security forces takes so much of the headlines. It is in the context of 300 or more patrols of young professional soldiers and police going out in fear of their lives day after day that we get the odd regrettable incident. But there is one way in which that can be stopped at once, and that is for the terrorists to stop their deadly business. There would then be no further need for Army or police patrols.


Last year, more than twice as many people were charged with murder as in 1990. Adjustments to force structures and deployments to meet the evolving threat continue to be made where appropriate. Reference has already been made to the establishment of the new post of Deputy Chief Constable (Operations), and I note the wide welcome that that has received in the House. Recruitment of the additional 441 police officers, which was announced last November, continues. For example, an addition al 104 regular officers and 40 reservists were recruited during May alone.
Although I welcome the appointment of the Deputy Chief Constable, I do not want anybody to think that there will be an immediate panacea as a result of it. We are hoping, as the terrorists' tactics evolve and change, to evolve and change the structures whereby the control and co-ordination of all the security forces takes place. Having a senior policeman clearly in charge of all operations of the police and the Army is, I hope everyone will agree, a step in the right direction.
Our commitment to the defeat of terrorism is undiminished. I hope that that message is getting through to the terrorists on both sides. There are some small signs that it is. Whether it is or not, the security forces will continue their relentless pursuit of the criminals. The emergency powers continued by this order are vital to enabling them to carry out that task. In that context, we would all agree with the valuable contribution by the hon. and learned Member for Fife, North-East (Mr. Campbell). It is on that basis and not with any pleasure, of which some accused us, but with reluctance and determination that I commend the order to the House.

Question put:—

The House divided: Ayes 281, Noes 170.

Division No. 30]
[11.29 pm


AYES


Adley, Robert
Browning, Mrs. Angela


Ainsworth, Peter (East Surrey)
Bruce, Ian (S Dorset)


Aitken, Jonathan
Burns, Simon


Alexander, Richard
Burt, Alistair


Allason, Rupert (Torbay)
Butler, Peter


Amess, David
Butterfill, John


Ancram, Michael
Campbell, Menzies (Fife NE)


Arbuthnot, James
Carrington, Matthew


Arnold, Jacques (Gravesham)
Carttis, Michael


Arnold, Sir Thomas (Hazel Grv)
Cash, William


Ashby, David
Channon, Rt Hon Paul


Aspinwall, Jack
Chaplin, Mrs Judith


Atkinson, Peter (Hexham)
Churchill, Mr


Baker, Nicholas (Dorset North)
Clappison, James


Baldry, Tony
Clark, Dr Michael (Rochford)


Banks, Matthew (Southport)
Clifton-Brown, Geoffrey


Banks, Robert (Harrogate)
Coe, Sebastian


Bates, Michael
Colvin, Michael


Batiste, Spencer
Congdon, David


Beggs, Roy
Conway, Derek


Beith, A. J.
Coombs, Anthony (Wyre For'st)


Bendall, Vivian
Coombs, Simon (Swindon)


Beresford, Sir Paul
Cope, Rt Hon Sir John


Blackburn, Dr John G.
Cormack, Patrick


Bonsor, Sir Nicholas
Couchman, James


Booth, Hartley
Cran, James


Bottomley, Peter (Eltham)
Currie, Mrs Edwina (S D'by'ire)


Bottomley, Rt Hon Virginia
Davies, Quentin (Stamford)


Bowden, Andrew
Davis, David (Boothferry)


Bowis, John
Day, Stephen


Brandreth, Gyles
Deva, Nirj Joseph


Brazier, Julian
Devlin, Tim


Bright, Graham
Douglas-Hamilton, Lord James


Brooke, Rt Hon Peter
Dover, Den


Brown, M. (Brigg & Cl'thorpes)
Duncan, Alan





Duncan-Smith, Iain
Legg, Barry


Dunn, Bob
Leigh, Edward


Durant, Sir Anthony
Lester, Jim (Broxtowe)


Eggar, Tim
Lidington, David


Elletson, Harold
Lightbown, David


Evans, David (Welwyn Hatfield)
Lilley, Rt Hon Peter


Evans, Jonathan (Brecon)
Lloyd, Peter (Fareham)


Evans, Nigel (Ribble Valley)
Lord, Michael


Evans, Roger (Monmouth)
Luff, Peter


Evennett, David
MacKay, Andrew


Faber, David
McLoughlin, Patrick


Fabricant, Michael
McNair-Wilson, Sir Patrick


Fairbairn, Sir Nicholas
Madel, David


Fenner, Dame Peggy
Maginnis, Ken


Field, Barry (Isle of Wight)
Maitland, Lady Olga


Fishburn, John Dudley
Malone, Gerald


Forsyth, Michael (Stirling)
Mans, Keith


Forsythe, Clifford (Antrim S)
Marland, Paul


Forth, Eric
Marlow, Tony


Fox, Dr Liam (Woodspring)
Marshall, John (Hendon S)


Fox, Sir Marcus (Shipley)
Martin, David (Portsmouth S)


Freeman, Roger
Mates, Michael


French, Douglas
Mawhinney, Dr Brian


Gallie, Phil
Mayhew, Rt Hon Sir Patrick


Gardiner, Sir George
Merchant, Piers


Garnier, Edward
Milligan, Stephen


Gill, Christopher
Mills, Iain


Gillan, Ms Cheryl
Mitchell, Andrew (Gedling)


Goodson-Wickes, Dr Charles
Mitchell, Sir David (Hants NW)


Gorman, Mrs Teresa
Moate, Roger


Gorst, John
Molyneaux, Rt Hon James


Greenway, Harry (Ealing N)
Montgomery, Sir Fergus


Greenway, John (Ryedale)
Moss, Malcolm


Griffiths, Peter (Portsmouth, N)
Needham, Richard


Grylls, Sir Michael
Nelson, Anthony


Hague, William
Neubert, Sir Michael


Hamilton, Rt Hon Archie
Nicholls, Patrick


Hamilton, Neil (Tatton)
Nicholson, David (Taunton)


Hampson, Dr Keith
Nicholson, Emma (Devon West)


Hannam, Sir John
Norris, Steve


Hargreaves, Andrew
Onslow, Rt Hon Cranley


Harris, David
Oppenheim, Phillip


Haselhurst, Alan
Ottaway, Richard


Hawkins, Nicholas
Page, Richard


Hawksley, Warren
Paice, James


Heald, Oliver
Paisley, Rev Ian


Heathcoat-Amory, David
Patnick, Irvine


Hendry, Charles
Pattie, Rt Hon Sir Geoffrey


Heseltine, Rt Hon Michael
Pawsey, James


Hicks, Robert
Peacock, Mrs Elizabeth


Hill, James (Southampton Test)
Pickles, Eric


Horam, John
Porter, Barry (Wirral S)


Howarth, Alan (Strat'rd-on-A)
Porter, David (Waveney)


Howell, Rt Hon David (G'dford)
Portillo, Rt Hon Michael


Howell, Ralph (North Norfolk)
Powell, William (Corby)


Hughes Robert G. (Harrow W)
Rathbone, Tim


Hunt, Rt Hon David (Wirral W)
Redwood, John


Hunt, Sir John (Ravensbourne)
Richards, Rod


Hunter, Andrew
Riddick, Graham


Jackson, Robert (Wantage)
Rifkind, Rt Hon. Malcolm


Jenkin, Bernard
Robathan, Andrew


Jessel, Toby
Roberts, Rt Hon Sir Wyn


Johnson Smith, Sir Geoffrey
Robertson, Raymond (Ab'd'n S)


Jones, Gwilym (Cardiff N)
Robinson, Mark (Somerton)


Jones, Nigel (Cheltenham)
Ross, William (E Londonderry)


Jones, Robert B. (W H'f'rdshire)
Rowe, Andrew (Mid Kent)


Kennedy, Charles (Ross, C & S)
Ryder, Rt Hon Richard


Key, Robert
Sackville, Tom


Kilfedder, James
Sainsbury, Rt Hon Tim


King, Rt Hon Tom
Shaw, David (Dover)


Kirkhope, Timothy
Shepherd, Rt Hon Gillian


Kirkwood, Archy
Shepherd, Colin (Hereford)


Knapman, Roger
Shepherd, Richard (Aldridge)


Knight, Mrs Angela (Erewash)
Skeet, Sir Trevor


Knight, Greg (Derby N)
Smith, Sir Dudley (Warwick)


Knight, Dame Jill (Bir'm E'st'n)
Smith Tim (Beaconsfield)


Knox, David
Smyth, Rev Martin (Belfast S)


Kynoch, George (Kincardine)
Soames, Nicholas


Lait, Mrs Jacqui Speed, Keith



Lawrence, Ivan
Spencer, Sir Derek






Spicer, Sir James (W Dorset)
Trotter, Neville


Spicer, Michael (S Worcs)
Twinn, Dr Ian


Spink, Dr Robert
Vaughan, Sir Gerard


Spring, Richard
Viggers, Peter


Sproat, Iain
Walden, George


Stanley, Rt Hon Sir John
Walker, A. Cecil (Belfast N)


Stephen, Michael
Walker, Bill (N Tayside)


Stern, Michael
Wallace, James


Stewart, Allan
Waller, Gary


Streeter, Gary
Ward, John


Sweeney, Walter
Wardle, Charles (Bexhill)


Sykes, John
Waterson, Nigel


Tapsell, Sir Peter
Watts, John


Taylor, Ian (Esher)
Wells, Bowen


Taylor, Rt Hon D. (Strangford)
Whittingdale, John


Taylor, John M. (Solihull)
Widdecombe, Ann


Taylor, Matthew (Truro)
Wilkinson, John


Taylor, Sir Teddy (Southend, E)
Willetts, David


Temple-Morris, Peter
Winterton, Mrs Ann (Congleton)


Thomason, Roy
Winterton, Nicholas (Macc'f'ld)


Thompson, Sir Donald (C'er V)
Wolfson, Mark


Thompson, Patrick (Norwich N)
Wood, Timothy


Thurnham, Peter
Yeo, Tim


Townend, John (Bridlington)
Young, Sir George (Acton)


Townsend, Cyril D. (Bexl'yh'th)



Tredinnick, David
Tellers for the Ayes:


Trend, Michael
Mr. Sydney Chapman and


Trimble, David
Mr. Timothy Boswell.




NOES


Adams, Mrs Irene
Clarke, Eric (Midlothian)


Ainger, Nicholas
Clarke, Tom (Monklands W)


Ainsworth, Robert (Cov'try NE)
Clelland, David


Allen, Graham
Coffey, Ms Ann


Anderson, Ms Janet (Ros'dale)
Cohen, Harry


Austin-Walker, John
Connarty, Michael


Banks, Tony (Newham NW)
Cook, Frank (Stockton N)


Barnes, Harry
Corbyn, Jeremy


Battle, John
Corston, Ms Jean


Bayley, Hugh
Cousins, Jim


Beckett, Margaret
Cox, Tom


Benn, Rt Hon Tony
Cryer, Bob


Bennett, Andrew F.
Cummings, John


Benton, Joe
Cunningham, Jim (Covy SE)


Bermingham, Gerald
Dalyell, Tam


Berry, Roger
Darling, Alistair


Betts, Clive
Davies, Bryan (Oldham C'tral)


Boateng, Paul
Davies, Ron (Caerphilly)


Boyce, Jimmy
Davis, Terry (B'ham, H'dge H'l)


Boyes, Roland
Denham, John


Bradley, Keith
Dixon, Don


Brown, Gordon (Dunfermline E)
Donohoe, Brian


Brown, N. (N'c'tle upon Tyne E)
Dowd, Jim


Burden, Richard
Eagle, Ms Angela


Byers, Stephen
Eastham, Ken


Caborn, Richard
Enright, Derek


Callaghan, Jim
Etherington, William


Campbell, Ms Anne (C'bridge)
Evans, John (St Helens N)


Campbell-Savours, D. N.
Flynn, Paul


Cann, James
Foster, Derek (B'p Auckland)


Chisholm, Malcolm
Foulkes, George


Clapham, Michael
Fyfe, Maria





Galloway, George
Marshall, Jim (Leicester, S)


Gapes, Michael
Martlew, Eric


George, Bruce
Meale, Alan


Gerrard, Neil
Michael, Alun


Gilbert, Rt Hon Dr John
Michie, Bill (Sheffield Heeley)


Godman, Dr Norman A.
Milburn, Alan


Godsiff, Roger
Miller, Andrew


Golding, Mrs Llin
Moonie, Dr Lewis


Gordon, Mildred
Morley, Elliot


Grant, Bernie (Tottenham)
Morris, Estelle (B'ham Yardley)


Griffiths, Nigel (Edinburgh S)
Mudie, George


Griffiths, Win (Bridgend)
Mullin, Chris


Gunnell, John
Murphy, Paul


Hain, Peter
O'Brien, William (Normanton)


Hall, Mike
O'Hara, Edward


Hanson, David
O'Neill, Martin


Harman, Ms Harriet
Orme, Rt Hon Stanley


Hendron, Dr Joe
Patchett, Terry


Heppell, John
Pickthall, Colin


Hill, Keith (Streatham)
Pike, Peter L.


Hinchliffe, David
Pope, Greg


Home Robertson, John
Powell, Ray (Ogmore)


Hood, Jimmy
Prentice, Ms Bridget (Lew'm E)


Howarth, George (Knowsley N)
Prentice, Gordon (Pendle)


Hoyle, Doug
Primarolo, Dawn


Hughes, Kevin (Doncaster N)
Quin, Ms Joyce


Hutton, John
Raynsford, Nick


Illsley, Eric
Redmond, Martin


Ingram, Adam
Reid, Dr John


Jackson, Ms Glenda (H'stead)
Robinson, Geoffrey (Co'try NW)


Jackson, Ms Helen (Shef'ld, H)
Roche, Ms Barbara


Jamieson, David
Rogers, Allan


Jones, Barry (Alyn and D'side)
Rooney, Terry


Jones, Ms Lynne (B'ham S O)
Ross, Ernie (Dundee W)


Jowell, Ms Tessa
Short, Clare


Keen, Alan
Simpson, Dennis


Kennedy, Ms Jane (L'p'l Br'g'n)
Skinner, Dennis


Khabra, Piara
Smith, Andrew (Oxford E)


Kilfoyle, Peter
Smith, C. (Isl'ton S & F'sbury)


Leighton, Ron
Squire, Rachel (Dunfermline W)


Lewis, Terry
Steinberg, Gerry


Livingstone, Ken
Strang, Gavin


Lloyd, Tony (Stretford)
Tipping, Paddy


Loyden, Eddie
Walker, Rt Hon Sir Harold


McCartney, Ian
Wardell, Gareth Gower)


McFall, John
Wareing, Robert N


McGrady, Eddie
Watson, Mike


McKelvey, William
Wicks, Malcolm


McMaster, Gordon
Winnick, David


McNamara, Kevin
Wise, Audrey


Madden, Max
Wright, Tony


Mahon, Alice



Mallon, Seamus
Tellers for the Noes:


Mendelson, Peter
Mr. Jack Thompson and


Marek, Dr John
Mr. Jimmy Dunnachie.

Question accordingly agreed to.

Resolved,
That the draft Northern Ireland (Emergency and Prevention of Terrorism Provisions) (Continuance) Order 1992, which was laid before this House on 19th May, be approved.

Orders of the Day — Prison (Liverpool, Walton)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]

Mr. Peter Kilfoyle: The debate concerns a basic dispute between my constituents and the Home Office about the proposal for a new prison in Fazakerley. The need for that prison is based on a projected prison population of 57,000 in the year 2000. In the past few years, the prison population has dropped from 51,000 to 47,000. Notwithstanding those fluctuations, on 3 June, a Home Office spokeswoman said in the Liverpool Daily Post and Echo:
The underlying trend means there will be more and more people in our jails.
The real problem is the admission of failure by the Home Office of its prison policy and the failure of the sentencing policy pursued by the courts. One in four prisoners are on remand, awaiting trial or sentence. Only one in three prisoners are in gaol for a crime relating to violence, sex or drugs. That prompts the obvious question: Why do we have so many people in our gaols? Why do we gaol more people than any other European country? Before we start talking about increasing our prison capacity, we must address those questions.
No one disputes the need for accommodation for the burgeoning prison population. No one disputes that any civilised society needs to provide some humane form of incarceration given that that is the punishment for so many of our crimes. However, why was it decided, within the past two weeks, to dust off a plan to build a new category B prison in Fazakerley in my constituency? We thought that that plan had been shelved 18 months ago. Now, the director general of the prison service, Joe Pilling, feels able to declare that the proposed site is "an ideal place"—without, to my knowledge, ever having visited it or considered its many drawbacks.
I can only assume that there is some sort of vindictiveness. It is certainly not the NIMBY syndrome affecting people in Walton or in Liverpool, because my constituency already has the largest prison of its kind in the country. There is a young persons unit at Dyson Hall and a special unit at Ashwell hospital two miles up the road. It is hardly a case of people who do not have prisons in their area complaining about one being built there. We are overloaded with prisons. I recall—I apologise in advance if I am incorrect—that the Minister of State, the hon. Member for Fareham (Mr. Lloyd), was prominent in his constituency in a campaign against a remand centre.

The Minister of State, Home Office (Mr. Peter Lloyd): indicated dissent.

Mr. Kilfoyle: I withdraw that, although I thought that the Minister was involved in that campaign. The Minister will not face in his constituency the problems that we face in mine, because the nearest prison to Fareham is the deportee prison in Gosport. He does not have the two and a half prisons that we have on our doorstep.
I am concerned that a disproportionate number of prisoners will be located in my constituency. It is as if we have been targeted as the refuse dump for the flotsam and jetsam of society. If the prison proposal is implemented, I compute that that area of north Liverpool could have up to 6 per cent. of the prison population. That is a wholly

disproportionate number of prisoners to locate in any one part of the country and they will be within a two-mile radius of Fazakerley. That is in addition to the madcap announcement that negotiations are taking place between the Home Office and Mersey Docks and Harbour Company and Merseyside development corporation about prison ships in the Mersey docks. That is incredible and would turn Liverpool into a virtual penal colony, a latter-day Botany bay.

Ms. Angela Eagle: Does my hon. Friend agree that this debate is timely, in that it is being held just days after the Minister confirmed in a letter to me that he is actively investigating the possibility of siting prison ships on the Mersey, possibly in Wallasey docks? He stated that a suitable accommodation vessel has already been identified by the Home Office and that preliminary talks about a suitable berth have been held with the Mersey Docks and Harbour Company. Does my hon. Friend also agree that floating prisons are not the answer to the current crisis in prison accommodation? That crisis vividly illustrates the Government's abject failure to deal with the crime explosion or to plan—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. The hon. Lady is a new Member and I hesitate to intervene, but an intervention must not be a speech.

Ms. Eagle: I accept that, Mr. Deputy Speaker. I have one final question for my hon. Friend. Will he join me in demanding that the Government respect the views of local people and abandon these Dickensian plans to create an Alcatraz on the Mersey?

Mr. Kilfoyle: I agree with all that my hon. Friend says. As I have said, Merseyside is being targeted as the country's No. 1 prison centre—I know not why. Perhaps the Minister will tell us how the Government deal with such matters regionally. Why must there be such a concentration in one small part of our region to deal with a large catchment area and a large number of prisoners in the north-west?

Mr. George Howarth: Does my hon. Friend agree that the people in Knowsley, and especially those in the Fazakerley end of my constituency, agree entirely with his opposition in the past, in this debate and in future to the development of another prison on the Fazakerley hospital site? I am sure that my hon. Friend the Member for Knowsley, South (Mr. O'Hara) agrees.

Mr. Kilfoyle: I am grateful to my hon. Friend for his support, which is shared by all parties and all sections of the community in our part of the world. We have a rare unanimity of view on the proposal. We believe that it is entirely alien to the needs of the area.
I am aware that a shortage of prison accommodation has resulted in prisoners being kept in police cells, but on 9 June—only two days ago—only 71 prisoners were held in police cells on Merseyside. How does that justify investment in a 600-prisoner category B prison? If it reduces the burden in other parts of the country, it will add to Merseyside's burden.

Mr. Eddie O'Hara: Is my hon. Friend aware that a similar proposal was made only a couple of years ago? The good citizens of Knowsley, both north and south, were consulted and they expressed their


views clearly. They were against the proposal. They are highly indignant that, so soon after they expressed their opinion, the proposal has been resurrected.

Mr. Kilfoyle: This is the third attempt in three years, I believe, to site a prison on the north side of Liverpool. As my hon. Friend has said, there was a successful campaign in 1988, as I recall, that prevented a similar prison being built in Bootle. Local opposition stymied that proposal. As I have said, it was only 18 months ago that we thought that the proposal that is the subject of the debate had been consigned to the dustbin.
It is not merely a matter of building another prison on the north side of Liverpool. Where have the people in the Home Office chosen to site it? It would be the length of a cricket pitch away from Fazakerley hospital, which is a large tower block. People recovering from major surgery would be looking down on a floodlit exercise yard. I can assume only that the Home Office has thought of a new form of therapy in conjunction with the Secretary of State for Health. I cannot see the presence of a prison being conducive to the recovery of patients in the Fazakerley hospital. They would find themselves looking at a huge security wall, and those on the upper floors would be looking down into the courtyard of the prison.
Fazakerley hospital is part of the Aintree hospital trust, and the Merseyside regional health authority was in the vanguard of the hospitals that decided to opt out following the introduction of the Government's so-called reforms. In this instance, however, we are at one with the trust because there has been a long-term plan to develop Fazakerley hospital as a centre of excellence along the lines of St. James's hospital in Leeds. That ambition will be thwarted at a stroke by the proposal to build a prison immediately alongside the hospital.
There were alternative offers for the site. A company called AMEC was pre-empted by the Home Office after it had offered £3.5 million to the regional health authority to buy the site and develop it. It would have been developed in conjunction with developments on the hospital site. It was hoped that there would be auxiliary industries to the hospital along with mixed housing and secondary developments. That was not to be. The Home Office took the site and the proposed development fell by the wayside, but that development still exists as an option, especially if the Home Office were to relent.
I understand that the contractor for the Home Office project is to be Mowlem. I am sure that the Minister will correct me if it is not the case that Mowlem is involved with a rather dubious sounding organisation, Correction Corporation of America, which is attempting to run privatised prisons in the United Kingdom. Does the Minister envisage, as one of the options, a privatised prison on the site, if the project were to go ahead?
If arguments that are based on the number of prisoners in the area and on the inappropriateness of the site have no effect on the Minister, surely he should heed the extent of the opposition that has been expressed by local people. He must take some cognisance of the wide range of individuals and organisations that have come together on the issue.
It is to be expected that my hon. Friends and I would be at one, but the hon. Member for Crosby (Mr. Thornton) has given us his full support. The hon. Member

for Liverpool, Mossley Hill (Mr. Alton), a Liberal Democrat, has given us his verbal support. We have the support of the Liverpool, Sefton and Knowsley district councils, which are all vehemently opposed to the proposal, as are the Aintree trust, the Merseyside police authority, the South Sefton magistrates, the Churches and, most importantly, the people.
A telephone poll, commissioned by the local paper, unscientific though that may be, showed that 96 per cent. of those contacted were against the prison and 4 per cent. were undecided.
The proposal has nothing to offer the residents of the area. It has nothing to offer the people of Merseyside or Liverpool. It is a foolish proposition. I hope that men and women of good sense and good will can come together, look at the matter afresh and see that it is in no one's interests.
Therefore, I invite the Minister to come to see for himself what it would be like to be in the tower block looking out on a prison and to meet the various people who have expressed support for our opposition to the scheme—reasonable people, who refuse to countenance an unreasonable project.

The Minister of State, Home Office (Mr. Peter Lloyd): I congratulate the hon. Member for Liverpool, Walton (Mr. Kilfoyle) on his good fortune in securing the debate and making a most effective maiden Adjournment speech.
I can well understand why he sought this opportunity to debate the proposal to build a new prison on a site at Fazakerley in his constituency. Any such plan is bound to create misgivings locally, and he has powerfully represented his constituents' doubts and fears, which I can well understand. I am grateful to him for providing me with this opportunity to explain the background to the planning application which the prison service recently made to Liverpool city council on the scheme.
I should begin by explaining briefly how the prison service came to select the site for a new prison. The site was identified in 1988 after a very thorough survey of sites in the north west. That covered some 40 sites in various parts of the region. The site at Fazakerley is particularly well suited to the prison service's needs, and in particular offered a rare opportunity to acquire a site in an urban area which was readily accessible but which was at a distance from any private housing.
Having identified the site, the prison service began negotiations with its owners, the regional health authority, and opened discussions with Liverpool city council about the development of the site.

Mr. Robert N. Wareing: Will the Minister give way?

Mr. Lloyd: I shall not because I have a lot to say. If there is time towards the end, I shall let the hon. Gentleman intervene.
In May 1989, the prison service made a formal application to Liverpool city council, and at that time there were full consultations with the general public as well as the council. In September 1989, however, the city council decided to object.
By then, there were already some signs that the prison population had begun to fall and that fall continued in 1990. From a peak of almost 50,000 in 1988, the prison


population fell sharply to 45,600 in 1990. The fall of 3,000 prisoners between 1989 and 1990 was the largest absolute fall in the prison population since 1915. A fall of that size obviously made it necessary for the service to review the prison estate and, in particular, the likely need for new prisons.
It became clear that, on the projections at that time, there was unlikely to be a need for a new prison at Fazakerley in the next few years, and in November 1990, it was announced that we were not proposing to proceed with the project. Early in 1991, my predecessor, my right hon. Friend the Member for Mitcham and Morden (Dame A. Rumbold), reviewed the sites which the prison service had earmarked for new prisons, and in March 1991 wrote to the hon. Gentleman's predecessor, Eric Heller, to let him know that the site at Fazakerley was to be sold.
But in the past year or so, the prison population has started to rise again. Having fallen to 45,000 on a seasonally adjusted basis between September 1990 and March 1991, it rose to 48,000 in April 1992. We now have 1,400 more people in custody than we had a year ago. So far, the rise in the prison population has not been as sharp as the preceding fall, but we have needed to look again at our projections of the future prison population. Recently, the Home Office has published projections of long-term trends in the prison population, which suggest that, in the mid-1990s, there are likely to be between 50,000 and 52,000 people in prison, and by the end of the century more than 57,000.
Although uncertainty is inevitably attached to any long-term projections, they are based on a thorough analysis of the trends, taking account of a wide range of factors, including demography and measures to divert offenders from custody.

Mr. George Howarth: So far, the Minister has based his case on two factors: the recent rise in the prison population, and the proximity of the proposed development to private housing. Will he also take into account the considerable amount of council and housing association property in the vicinity? Not only is there a good deal of private housing in the general area; there is a good deal of residential housing in the immediate area.

Mr. Lloyd: There is never a perfect site. It is entirely unsuitable for a prison to be sited far away from any central population. If an urban area is involved, there are always difficulties, but I think that the hon. Gentleman will accept that private and council residential housing is not particularly close to the site, and that it is a surprisingly suitable site, given its urban surroundings.

Mr. Wareing: Will the Minister give way?

Mr. Lloyd: I will, because I said earlier that I would, but as a result I shall not have time to complete my own remarks.

Mr. Wareing: My hon. Friends are quite right. The Sparrow Hall estate, in my constituency, is well within a mile of the proposed prison.
My point, however, is that the Government's proposal affects another Government Department. What consultation has the Minister had with the Aintree hospital trust and the South Sefton community health council? The proposal is most objectionable: sick people in the Fazakerley hospital will face a prison just across a narrow road, and that is bound not to improve their health.

Mr. Lloyd: Of course we have had discussions with the health authorities. That is why the hospital is being landscaped as it is. There is no particular problem in prisons being sited near hospitals: Wormwood Scrubs and the Hammersmith hospital provide an example. It is possible for such institutions to function close to each other if they are sensibly designed and if the landscaping is good, and that is what we intend in this instance.
Against that background, we are looking again at the need for new prisons. No firm decisions have yet been made about when work will start. Too often in the past, however, the prison service has found itself unable to respond quickly to the pressure imposed on it, because it has not had sites for new prisons that it could develop rapidly. We are determined that that should not happen again.

Mr. Kilfoyle: Will the Minister give way?

Mr. Lloyd: No, I will not. I have very little time left, and the hon. Gentleman has raised a good many points.

Mr. Kilfoyle: What about the visit?

Mr. Lloyd: When I am in the area, I shall make a point of looking at the prison, but I give no undertaking to do so in the near future. As the hon. Gentleman himself suggested, the director general of the prison service will be visiting the site in the near future, and I shall certainly hear his report when he comes back.
Our forecasts suggest that there will be a particular need for new places in the north-west—

Mr. Howarth: Will the Minister give way?

Mr. Lloyd: The hon. Gentleman keeps interrupting me. I have been asked a number of questions, and I am trying to present the whole picture. The hon. Gentleman knows very well that time for an Adjournment debate is limited, and more than a quarter of an hour—more than half the time—has been taken by the hon. Member for Walton and several of his hon. Friends, who have interrupted. I have no objection to those interventions, although I was not asked, but I consider it reasonable, when I have allowed interventions, for me to be allowed to conclude in my own way.
There are particular needs for new places in the north-west. Against that background, the prison service recently made a fresh application to Liverpool city council for the construction of a 600-place secure prison on the Fazakerley site. The hon. Member for Walton argued that there is no justification for reviving the proposal to build the prison, but we expect the prison population to increase rapidly.
I shall skip over a number of points because of the interruptions, but the hon. Member for Wallasey (Ms. Eagle) spoke about using floating detention centres as a temporary measure. Prisoners being held in police cells are a major problem throughout the country, but it is particularly acute in the north-west. There are 97 prisoners in Liverpool bridewell, which is unsuitable for holding prisoners for any length of time. We are considering every possible short-term measure to relieve police cells of prisoners, including floating detention centres. Again, no decision has been taken on whether we should have them or where they should be.
The hon. Member for Walton argued that it is unjustifiable at any time to site a new prison at Fazakerley,


and that the prison service should look elsewhere in the north-west or somewhere else in the country to meet its needs.
The prison service looked widely in the north-west before identifying the Fazakerley site. A wide range of factors must be met in choosing a site for a new prison. The site must be large enough. A modern prison for 600 inmates needs at least 35 acres. We tried to avoid sites near enough to affect houses, schools and places of worship detrimentally, since there are likely to be particularly strong objections to a prison in those neighbourhoods. We looked for a site that could meet the shortfall in places in particular parts of the country.
Finally, we looked for a site that is readily accessible to visitors, which, as anyone who has read the Woolf report will know, is a most important factor. We attach great importance to this factor as part of our commitment to helping prisoners maintain family relationships. Too often in the past the prison service has been driven to use sites for prisons that are remote and where visits by families burden them with long and wearisome journeys. Labour Members are arguing that the prison should be sited so far away that family relationships could not be maintained.
Fazakerley meets this and other criteria for new prisons. Transport in the area is good.

Mr. Kilfoyle: Will the Minister give way?

Mr. Lloyd: No.

Mr. Kilfoyle: It is a small point.

Mr. Lloyd: They are small points. If I have time before I finish, I shall give way.
The hon. Member for Walton argued that there is no need for additional accommodation in the Liverpool area, as Her Majesty's prison, Liverpool has difficulty in filling its remand wing from the local catchment area. We do not envisage Fazakerley taking adult remand prisoners. It would be used to provide training places for adult males, and would thereby reduce the number of sentenced prisoners at Liverpool.
At present, disproportionate numbers of sentenced prisoners must be held at Liverpool because there are insufficient training places in the north-west. The remaining 300 places in the prison would be used for young men on remand and would relieve pressures at

Hindley, which currently takes young men on remand from a wide area of the north-west, including Merseyside and north Wales, which is unsatisfactory.
Hindley is habitually overcrowded and, at present, about 100 young men who would otherwise be in Hindley are held in police cells. The opening of a new establishment in Lancaster early next year will ease some of the pressures at Hindley, but there will, in our view, still be considerable pressures there which must be eased.
The hon. Gentleman also argued that there are already too many institutions serving the criminal justice system in the area, such as the prison at Walton, the secure hospital at Park Lane and Dyson Hall assessment centre, but the prison is more than a mile from the site of Fazakerley, Park Lane is about four miles, and even the assessment centre is a considerable distance from the boundary of the secure zone of the prison.
The hon. Gentleman also argued that the prison would be too close to Fazakerley general hospital and that the hospital would overlook the prison. We held discussions with the regional health authority about that and have agreed with its arrangements for landscaping the boundary between the hospital and the proposed prison. We believe that the screening will ensure that the hospital is not adversely affected. I do not accept the argument that there would be too many institutions in that part of Liverpool. In any case, it would be virtually impossible to find locations for prisons in an urban area if they had to be near neither institutions nor housing.
One hon. Gentleman said that floodlighting would disturb patients in the hospital. In fact, the prison would be lit only to the normal level of street lighting. The prison service has made it clear that it intends to be a good neighbour in Liverpool. Not only will there be economic benefits from a new prison—an investment of about £80 million in construction and, thereafter, opportunities for about 300 jobs, many to be filled by people recruited locally—but the prison service is conscious of its responsibilities—

Mr. George Howarth: The Minister should visit the site.

Mr. Lloyd: The hon. Gentleman should also visit prisons around the country to see that it is possible to have a prison in an urban area—

The motion having been made after Ten o'clock on Wednesday evening, and the debate having continued for half an hour MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eleven minutes past Twelve o'clock.